Loading...
HomeMy WebLinkAbout03.c. Review draft Position Paper re public hearing on fee ordinances Page 1 of 29 Item 3.c. BOARD OF DIRECTORS ' POSITION PAPER DRAFT MEETING DATE: APRIL 23, 2019 SUBJECT: REVIEW DRAFT POSITION PAPER TO CONDUCTA PUBLIC HEARING TO RECEIVE PUBLIC COMMENTAND CONSIDER ADOPTING ORDINANCES THAT WOULD BECOME EFFECTIVE JULY 1, 2019 AS FOLLOWS: • UNCODIFIED ORDINANCE NO. -AMENDING THE SCHEDULE OF CAPACITY FEES, RATES, AND CHARGES, REPLACING ORDINANCE NO. 301 IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.12; AND • UNCODIFIED ORDINANCE NO. -AMENDING THE SCHEDULE OF ENVIRONMENTAL AND DEVELOPMENT-RELATED FEES AND CHARGES, REPLACING ORDINANCE NO. 302 IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.30 DATA ISAVAILABLE, AS REQUIRED BYGOVERNMENT CODE TITLE 7, DIVISION 1, CHAPTER 8, SECTION 66016. IF YOU HAVE QUESTIONS, PLEASE CONTACT SENIOR ENGINEER THOMAS BRIGHTBILLAT(925) 229-7338. SUBMITTED BY: INITIATING DEPARTMENT: BRYAN MCGLOIN, MANAGMENT ANALYST ENGINEERING AND TECHNICAL SERVICES- THOMAS BRIGHTBILL, SENIOR ENGINEER PDS-RATES AND FEES REVIEWED BY: DANEA GEMMELL, PLANNING AND DEVELOPMENT SERVICES DIVISION MANAGER JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES ISSUE State Law and District Code requires that a public hearing be held to receive public comment on ordinances which revise Capacity Fees and the Environmental and Development-Related Fees and Charges. April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 109 of 156 Page 2 of 29 BACKGROUND Capacity Fees Central San charges a Capacity Fee when properties first connect to the 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 Central San's assets and the number of Central San customers. California Senate Bill 1769, enacted in September 1993, defines Capacity Charges for water and sewer agencies in Section 66013 of the California Government Code. The equity buy-in method used by Central San conforms to the requirements contained in Section 66013. A recommended ordinance to establish the following proposed Capacity Fees is attached: Fee Category Current Proposed % Change Gravity Zone Fee $6,700 $6,776 1.1% Pumped Zone Fee $8,336 $8,362 0.3% Environmental and Development-Related Fees and Charges Chapter 6.30 of the District Code includes provisions for the Board of Directors to adopt an uncodified schedule of fees and charges for environmental and development services provided to property owners, contractors, developers, septic and grease waste haulers, and permitted industrial users. These services include permit counter assistance; plan review; construction inspection for private side sewers and public main line extensions; addition of new sewers, parcels, and permit information to Central San maps; administration of source control permits and inspections; and septic and grease hauler permitting, sampling and treatment. Following a review of the fees and charges by Central San staff, it is recommended that they be revised to reflect changes in the costs to provide the services, including updated labor costs. Information regarding the proposed changes is included in the attached report. A comparison of current and staff-recommended fees and charges is presented in Exhibit A to the attached proposed ordinance. If the proposed revisions to the Environmental and Development-Related Fees and Charges are adopted by Central San's Board, 20 charges would remain unchanged, 45 charges would increase,16 charges would decrease with 4 new fees and 3 fees eliminated. ALTERNATIVES/CONSIDERATIONS The Board may decline to adjust the Schedule of Capacity Fees. I n this event, the fees that went into effect on July 1, 2018 would continue. This is not recommended as capacity fees would not accurately reflect the value of each parcel's share of Central San's assets. The Board may decline to adjust some or all of the Environmental and Development-Related Fees and Charges. In this event, the fees that went into effect on July 1, 2018 would continue. This is not recommended as Central San would not fully-recover costs expended in providing the corresponding environmental and development-related services. April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 110 of 156 Page 3 of 29 FINANCIAL IMPACTS If the recommended Capacity Fees are adopted, staff estimates that approximately$75,000 in additional capacity fee revenue would be generated by the fee increases in fiscal year(FY) 2019-20. This projection is based on the projected development of 1,000 residential unit equivalents (RUE). The proposed Environmental and Development-Related Fees and Charges are designed to recover Central San' s direct and indirect labor costs, other operating costs, and administrative overhead costs incurred in providing environmental and development-related services. If the recommended Environmental and Development-Related Fees and Charges are adopted, staff estimates that between $70,000 and $80,000 in additional revenue will be generated in FY 2019-20. This projection is based on the range of increases shown in the attached staff report and assumes that the level of development would approximate that of the current fiscal year. COMMUNITY OUTREACH Staff conducted a coordinated outreach program to inform and solicit input from stakeholders and interested customers regarding the proposed Capacity Fees and the proposed Environmental and Development-related Fees and Charges. Notices of the public hearing will be posted and published on May_and May_, 2019, in the Contra Costa Times and San Ramon Valley Times. In addition, approximately 420 letter reports, including the proposed schedule of rates and charges, will be distributed to developers, engineers, architects, contractors, waste haulers, representatives of the Building Industry Association of the Bay Area, and others who have requested notice of fee increase proposals. As of May_, 2019, _stakeholders or members of the public had contacted Central San with comments. Any comments received after May_, 2019 will be presented to the Board of Directors at the public hearing. COMMITTEE RECOMMENDATION The Finance Committee reviewed the proposals at its April 23, 2019 meeting and did/did not recommend approval. RECOMMENDED BOARD ACTION Hold the public hearing. Once the public hearing has concluded: 1. Adopt the attached proposed uncodified ordinance revising the "Schedule of Capacity Fees, Rates, and Charges" effective July 1, 2019, which includes the following findings: • Central San has made a substantial investment in assets that will benefit new users. o The purpose of the Capacity Fee Program is to equalize the investment in Central San's assets among current and new users, thus ensuring that new users pay their fair share for facilities and other assets. o There is a strong and reasonable relationship between the actual added burden imposed by new users and the proposed Capacity Fee. o 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 Central San's 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; and ■ New users' buy-in to all of Central San's assets including facilities and the balances in the: April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 111 of 156 Page 4 of 29 ■ Sewer Construction Fund ■ Running Expense Fund ■ Debt Service Fund ■ Self Insurance Fund • For Central San 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. o The proposed fees, rates and charges are exempt from the California Environmental Quality Act(CEQA) per section 6.12.020 of the District Code. 2. Adopt the proposed uncodified ordinance revising the Schedule of Environmental and Development-Related Fees and Charges effective July 1, 2019, including the following findings: o Central San incurs substantial costs to provide environmental and development-related services. o It is necessary to charge customers and other users to recover the reasonable cost of providing the services. o The proposed fees and charges reasonably represent Central San's actual costs to provide the services. o The proposed fees and charges are exempt from the California Environmental Quality Act (CEQA). (Four affirmative votes are required for adoption) Strategic Plan Tie-In GOAL THREE:Be a Fiscally Sound and Effective Water Sector Utility Strategy 1 - Conduct long-range financial planning ATTACHMENTS: 1. Proposed Capacity Fee Ordinance 2. Report regarding Capacity Capacity Fee Update 3. Proposed Environmental and Development Fee Ordinance 4. Report regarding Environmental and Development Fees and Charges April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 112 of 156 Page 5 of 29 Attachment 1 ORDINANCE NO. 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 (Central San) finds that substantial study has been conducted regarding the impacts of planned future development within Central San's service area on existing Central San services and facilities, along with an analysis of new, improved, or expanded Central San 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 Central San services and facilities occasioned by this added burden; and WHEREAS, these studies were undertaken by Central San staff and culminated in documents that are part of the public record, to wit: the Capital Improvement Budget and Ten-year Capital Improvement Plan contained in the document titled, "Central Contra Costa Sanitary District FY 2018-19 Budget," and the Staff Report on Proposed Capacity Fee Program dated April 15, 2019; and WHEREAS, these studies also included the Wastewater Capacity Fee Review Study dated May 28, 2018 by Black & Veatch which reviewed Central San's methodology and calculations; and WHEREAS, it is reasonable and necessary that all users of Central San'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 Central San services and facilities; and WHEREAS, a properly noticed public hearing regarding the proposed Capacity Fee Program revisions was held on June 6, 2019, 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 Central San to implement the proposed uncodified Schedule of Capacity Fees, Rates and Charges; and WHEREAS, the Board finds as follows: 1. Central San has made a substantial investment in assets that will benefit new users. 2. For Central San 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. April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 113 of 156 Page 6 of 29 Central Contra Costa Sanitary District Ordinance No. Page 2 of 3 3. The purpose of the Capacity Fee Program is to equalize the investment in Central San's assets among current and new users, thus ensuring that new users pay their fair share for facilities' capacity and services. 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 Central San's 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; and • New users' buy-in-to-all-assets of Central San 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 the Central San 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. 301 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. 301 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 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 114 of 156 Page 7 of 29 Central Contra Costa Sanitary District Ordinance No. Page 3 of 3 ordinance, such chapter, ordinance or part of an ordinance shall be deemed to remain 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 Central San and shall be published once in the Contra Costa Times and San Ramon Valley Times, newspapers of general circulation within Central San, and shall be effective on July 1, 2019. PASSED AND ADOPTED this 6th day of June, 2019, by the Board of Directors of the Central Contra Costa Sanitary District by the following vote: AYES: Members: NOES: Members: ABSENT: Members: David R. Williams President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Katie Young 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 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 115 of 156 Page 8 of 29 EXHIBIT "A" SCHEDULE OF CAPACITY FEES, RATES, AND CHARGES (Uncodified) Placeholder Page 1 of 1 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 116 of 156 Page 9 of 29 Attachment 2 CENTRAL CONTRA COSTA SANITARY DISTRICT Report Regarding the Capacity Fee Update April 15, 2019 INTRODUCTION Central Contra Costa Sanitary District (Central San) charges a Capacity Fee when properties are first connected 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 Central San's customers. This memo summarizes the basis for the Capacity Fee and presents the calculations for the updated fee. BACKGROUND The total value of Central San's existing assets (approximately $1.9 billion) is much greater than the value of any future facilities expansion needed to accommodate future customers. While Central San's FY 2018-19 Budget lists over $800 million in projects over the next 10 years, most of these projects are for renovation, regulatory compliance, replacement or upgrading of facilities to maintain capacity for both current and prospective customers. Central San 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 Central San's Capacity Fee. Central San 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 Central San conforms to the requirements contained in Section 66013. Central San's Capacity Fee methodology and calculations were reviewed by Black & Veatch in the fall of 2017. Their March 2, 2018, report titled Wastewater Capacity Fee Review Study made the following findings: • The equity-buy-in methodology used by Central San is appropriate. • Central San's use of Replacement Cost Less Depreciation (RCLD) is appropriate. • The exclusion of contributed assets from the calculation is appropriate to avoid double recovery of assets. • The use of different service zones for gravity and pumped zones is appropriate. April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 117 of 156 Page 10 of 29 Capacity Fee Update Report Page 2 April 15, 2019 CALCULATION APPROACH The Capacity Fee is adjusted each year to reflect the changes in the value of Central San's assets. It is calculated using the equity buy-in approach which divides the value of Central San's assets by the current number of Residential Unit Equivalents (RUEs) to determine the fee. The calculated value of Central San's assets is 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 Central San'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. • 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)" is included in the current value of facilities for determination of Capacity Fees. This category accounts for Central San'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. • 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 Central San's outstanding debt. Contributed assets are generally not included in the calculation in order to avoid double recovery of costs, as described in Manual of Practice 27. 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 determined by calculating the number of RUEs. Value of Assets Equity Buy-in Fee = ---------------------------------------- Number of Customers (RUEs) April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 118 of 156 Page 11 of 29 Capacity Fee Update Report Page 3 April 15, 2019 RECOMMENDED CAPACITY FEE Staff recommends that the Board of Directors adopt Capacity Fees for FY 2019-20 by applying the valuation approach and facilities life cycles described above. The updated fees are: Fee Category Current Proposed % Change Gravity Service $6,700 per RUE $6,776 per RUE 1.1% Pumping Service $8,336 per RUE $8,362 per RUE 0.3% The recommended fee calculation approach is a rational, practical, equitable, and defensible method to determine the financial burden of new connections. A breakdown of the proposed Capacity Fees by asset category is presented in Table 1. Table 2 shows a comparison of the proposed Capacity Fees to the fees charged by neighboring agencies. The service life assumptions for each asset category are included in Table 3. Attached Supporting Documents: 1. Table 1 — Capacity Fees Calculation 2. Table 2— Comparison of Capacity Fees 3. Table 3—Average Useful Service Life April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 119 of 156 CENTRAL CONTRA COSTA SANITARY DISTRICT Report Regarding Capacity Fee Update Table 1-Capacity Fees Calculation-FY 2019-20 (Buy-in to all assets. Values through 06/30/2018) Value per FY 2018- Asset Category Asset Value' RUE 19 Value Change Change (S/RUE) per RUE ($) N Land $52,137,295 $307 $301 $6 2.0% Facilities Treatment Plant/Outfall (45% @ 100 yrs+20% @ 75 yrs+35% @ 30 yrs) $361,745,206 $2,133 $2,095 $38 1.8% Recycled Water Facilities(75% @ 50 yrs+25% @ 30 yrs) $19,401,020 $114 $110 $4 3.6% Collection System Trunks and Interceptors(30% @ 150 yrs+70% @ 100 yrs) $337,298,965 $1,989 $2,005 ($16) -0.8% Contributed Mains(100% @ 75 yrs) $658,442,000 not included District Renovated Mains(100% @ 100 yrs) $228,168,726 $1,345 $1,256 $89 7.1% Pumping Stations(45% @ 100 yrs+20% @ 75 yrs+35% @ 30 yrs) $79,846,047 $1,586 3 $1,636 ($50) -3.1% General Improvements(Buildings, Equipment,etc.) $65,874,643 $388 $395 ($7) -1.8% (50% @ 50 yrs+35% @ 25 yrs+ 15% @ 10 yrs) Major Repairs(100% @ 10 yrs) $12,092,555 $71 $69 $2 2.9% Sewer Construction Fund Balance (net of outstanding debt) $41,006,302 $242 $209 $33 15.8% Running Expense Fund & Debt Service Fund Balances $25,461,157 $150 $225 ($75) -33.3% Self Insurance Fund Balance $6,280,047 $37 $35 $2 5.7% TOTAL VALUE: $1,887,753,964 Capacity Fee-Gravity Service $1,149,465,916 $6,776 $6,700 $76 1.1% Capacity Fee-Pumped Service $1,229,311,964 $8,362 4 $8,336 $26 0.3% 169,595 Total Residential Unit Equivalents(RUES) 49,196 Pumped Zone RUES Notes: 1. Original cost escalated to current dollars less depreciation except land which is original cost escalated 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 3/15/2019 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 120 of 156 Page 13 of 29 CENTRAL CONTRA COSTA SANITARY DISTRICT Report Regarding Capacity Fee Update Table 2 — Comparison of Capacity Fees AGENCY CAPACITY FEE Dublin San Ramon Services District $15,533 Mt View Sanitary District $9,330 Proposed CCCSD Pumped Zone $8,362 Current CCCSD Pumped Zone $8,336 Antioch (Delta Diablo Sanitation District for Treatment) $7,704 West County Wastewater District $7,082 Proposed CCCSD Gravity Zone $6,776 Current CCCSD Gravity Zone $6,700 Concord $5,043 Pittsburg (Delta Diablo Sanitation District for Treatment) $4,358 Bay Point (Delta Diablo Sanitation District for Treatment) $3,940 Based on publicly available data as of April 15, 2019 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 121 of 156 Page 14 of 29 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 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 122 of 156 Page 15 of 29 Attachment 3 ORDINANCE NO. AN ORDINANCE OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT ADOPTING AN UNCODIFIED SCHEDULE OF ENVIRONMENTAL AND DEVELOPMENT-RELATED FEES AND CHARGES IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.30 WHEREAS, the Board of Directors (Board) of the Central Contra Costa Sanitary District (Central San) finds that Central San incurs substantial costs to provide various environmental and development services, such as, but not limited to, administration and processing of annexations, customer assistance at the permit counter, plan review and inspection for sewer line installation, alteration, replacement and repair, the inclusion of new information on Central San's maps, administration and permit inspection related to the Source Control Program, permitting of septage and grease haulers, and treatment of grease and septage at the treatment plant; and WHEREAS, the Board finds that it is necessary to charge customers and other users of Central San's services to recover the reasonable cost of providing said services; and WHEREAS, Central San staff has comprehensively analyzed the actual cost of providing the various environmental and development services listed above based on direct costs, staff costs, and overhead for time and effort incurred to provide listed services; and WHEREAS, the Board finds that the Schedule of Environmental and Development- Related Fees and Charges, as reflected in Exhibit "A" to this Ordinance, reasonably represents the actual costs to provide the services delineated in said Schedule of Fees and Charges; and WHEREAS, the Board finds that this action is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15273 (a)(1) and (3) of the State CEQA Guidelines, in that the Fees and Charges are being charged merely to reimburse Central San for staff costs and expenses. NOW, THEREFORE, the Board of the Central San does hereby ordain as follows: Section 1 (To be uncodified) The Schedule of Environmental and Development-Related Fees and Charges as set forth in full in Exhibit "A" to this Ordinance, is hereby incorporated in full herein by this reference, is hereby adopted in uncodified form pursuant to the provisions of District Code Chapter 6.30. As of the effective date of this Ordinance, the fees and charges for each environmental and development service shall be as set forth in said schedule, and shall remain in effect until amended or replaced by ordinance. April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 123 of 156 Page 16 of 29 Central Contra Costa Sanitary District Ordinance No. Page 2 of 2 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. 302 shall remain in effect and such Fees and Charges due thereunder for any categories of users shall remain due and payable as if those portions of Ordinance No. 302 have 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 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 Central San and shall be published in the Contra Costa Times and San Ramon Valley Times, newspapers of general circulation, published and circulated within Central San and shall be effective as of July 1, 2019. PASSED AND ADOPTED by the Board of Directors of the Central Contra Costa Sanitary District on the 6th day of June, 2019, by the following vote: AYES: Members: NOES: Members: ABSENT: Members: David R. Williams President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Katie Young 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 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 124 of 156 Page 17 of 29 EXHIBIT "A" SCHEDULE OF ENVIRONMENTAL AND DEVELOPMENT-RELATED FEES AND CHARGES (Uncodified) Placeholder Page 1 of 1 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 125 of 156 Page 18 of 29 Attachment 4 CENTRAL CONTRA COSTA SANITARY DISTRICT Report Regarding Environmental and Development-Related Fees and Charges Update April 23, 2019 OVERVIEW The Central Contra Costa Sanitary District (Central San) Board of Directors will soon consider adopting an ordinance to revise Chapter 6.30, Schedule of Environmental and Development-Related Fees and Charges (Schedule), for various environmental and development services. BACKGROUND Chapter 6.30 of the District Code includes a schedule of fees and charges for environmental and development-related services provided to property owners, contractors, developers, septic and grease waste haulers, and permitted industrial users. These services include permitting; plan review; inspection of construction for side sewers and main line extensions; addition of new sewer, parcel, and permit information to Central San's maps; source control permits and inspections; and septic and grease hauler sampling and treatment. These fees and charges are intended to recover Central San's labor costs, other operating expenses, and administrative overhead incurred in providing the related services. Central San staff annually reviews the fees and the costs to provide the corresponding services in order to assess whether changes may be appropriate. The last update to these fees was on July 1, 2018. The California State Law generally requires that fees and charges do not exceed the cost of providing the service for which a fee or charge is levied. PROPOSED FEES AND CHARGES For Fiscal Year (FY) 2019-20, staff is recommending various changes to the Schedule, taking into consideration relevant operating costs, including costs for labor, mileage, and other costs realized by Central San (recording fees, survey fees, etc.). A comparison of the current and proposed fees and charges is included as Attachment 1. In summary, for the 84 items included on the FY 2018-19 Schedule, staff recommends increases to 45 items, decreases to 16, elimination of 3, and no change to the remaining 20. Staff also recommends adding 4 items covering activities already being conducted but whose inclusion as separate items on the Schedule will clarify amounts due and enable Central San to appropriately recover the related costs from the activities generating them. April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 126 of 156 Page 19 of 29 Report Regarding Environmental and Development-Related Fees & Charges Page 2 April 23, 2019 Increases Staff recommends increases to 45 of the 84 items on the current Schedule. These increases range from +0.4% to +32.7%, averaging +6.1%. Central San's overhead rate will be decreasing from 219% to 203% in FY 2019-20. However, despite this decrease, some salary increases (i.e. overtime and other premium salary rates) have a greater effect on base salaries than the decrease in overhead, resulting in an overall increase for fees that include premium labor costs. Additionally, as a part of the current fee review process, program managers reviewed the cost elements involved in calculating these fees and determined that necessary staffing, levels of effort, or other cost factors required adjustment in order to more accurately recover the costs for certain fees listed on the current Schedule. For the most significant increases: • Process Real Property Agreement, License, or Easement (D-2) (+32.7%): Changes to effort in direct labor result in a 4.3% overall increase to this item. The remainder of the increase is attributed to the inclusion of Inspection costs for Sewer Locating and Marking. This is a charge that is listed separately on the Schedule, but since locating/marking is an inherent component of this process, it is being incorporated directly into this charge instead of as a separate fee. • Process Quitclaim Deed — Plat and Legal by Others (D-1) (+13.2%): Due to changes in staffing and levels of effort, direct labor for this item increases from $265.70 in FY 2018-19 to $308.98 in FY 2019-20 and overall cost increases from $848 to $960. Decreases Staff recommends decreases to 16 of the 84 items on the current Schedule. These decreases range from -0.5% to -9.5%, averaging -2.2%. The proposed decreases are primarily driven by the decrease in Central San's overhead rate for FY 2019-20 from 219% to 203%, which in many cases is significant enough to result in a line item decrease even after accounting for regular salary increases. Additionally, as a part of the current fee review process, program managers reviewed the cost elements involved in calculating these fees and determined that required staffing levels of effort or other cost factors required adjustment, resulting in decreases for some items. April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 127 of 156 Page 20 of 29 Report Regarding Environmental and Development-Related Fees & Charges Page 3 April 23, 2019 Eliminations Another result of the management review described above is the staff recommendation that 3 of the 84 fees on the current Schedule should be eliminated: • Special Cut Sheet Review (A-1); • Right of Way Document Review — No Changes Required (A-1); and • Site Collector Plan Check (A-4). These fees represent activities that are either no longer conducted or that have been incorporated into other activities for which fees are already included on the current Schedule. Additions Staff recommends the addition of four fees intended to supplement existing fees on the current Schedule. These additions will allow for more accurate cost recovery related to existing items. • Base Fee for Recycled Water Review (A-1): Due to the expansion of interest in recycled water, plan review requirements were considered and determined to result in lower fee requirements than those for sewer service. As a result, it is appropriate to include these reviews as a separate charge on the Schedule at a lower cost than other mainline plan reviews. • Right of Way Document Review (IOD/Subdivision Map) (A-1): Right of Way reviews including subdivision maps do not require as much effort as those involving separate legal instruments, and it is appropriate to include these reviews as a separate charge on the Schedule at a lower cost than other right of way reviews. • Right of Entry (Each Additional Hour) (D-4): The current Schedule has no existing item for Right of Entry reviews that exceed the base fee (2 hours), so the proposed Schedule adds a new item to represent "Each Additional Hour", if required. • New Annexations (A-6): Prior Schedule references to cost recovery for annexations were unclear in their reflection of Central San's authorities related to new and existing annexations described in District Code, which the recommended fee split will clarify. Unchanged Staff also recommends leaving 20 of the 84 items on the current schedule unchanged. Seven of these are indicated on the Schedule as fees where "Actual Expenses" are charged. The remainder either have no charge (e.g. Class III permits for industrial users), are nominal amounts normally associated with other billed activities (e.g. $25/$50 for side sewer cleanout), or are fees that are not associated with labor and overhead costs (e.g. per-page printing costs). April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 128 of 156 Page 21 of 29 Report Regarding Environmental and Development-Related Fees & Charges Page 4 April 23, 2019 SUMMARY If the proposed revisions to the Schedule are adopted, 20 items will remain unchanged, 45 will increase, and 16 will decrease while 3 charges will be eliminated. Additionally, 4 new items will be added related to existing activities which will allow for more appropriate fee assessments and accurate cost recovery. FY 2018-19 revenue for Environmental and Development-Related Fees and Charges is budgeted at $2.4 million. Staff estimates that approving the recommended fee and charge adjustments will result in a revenue increase of between $75,000 and $85,000 for FY 2019-20. Attached Supporting Documents: 1. Comparison of Current& Proposed Fees and Charges for FY 2019-20 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 129 of 156 Page 22 of 29 ATTACHMENT 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMPARISON OF CURRENT & PROPOSED FEES & CHARGES FOR FY 2019-20 DRAFT Fee Category Current Fee Proposed Fee % Change DEVELOPMENT AND PLAN REVIEW Review of new sewer and recycled water plans and related documents;review of plans for and processing of residential and commercial permit applications;installer reimbursement of sewer construction costs from subsequent connectors;identification of right-of-way conflicts. (A-1) Development Review: Mainline Plan Review: Base Fee for Sewer Service Review (minimum charge- includes 4 hours of plan review) $3,764 $4,169 10.8% Base Fee for Recycled Water Review (minimum N/A $2,975 N/A charge- includes 4 hours of plan review Manhole/ ReW Connection only design & plan ° review $1,382 $1,450 4.9/° Each additional hour in excess of base fee $190 $198 4.2% Special Cut Sheet Review $378 ELIMINATE N/A Right of Way Document Review: Right of Way document review-Appurtenant Easements Base fee- 3 hours) $740 $733 -0.9% Right of Way Document Review- IOD/ N/A $897 N/A Subdivision Ma each Right of Way Document Review- Separate ° Instrument Base Fee) $835 $916 9.7/o Right of Way Document Review- No Changes Required $533 ELIMINATE N/A Each additional hour in excess of base fee $285 $264 -7.4% (A-2) Application Fees: Overflow Protection Device Installation (OPD no charge no charge no change only) Side Sewer Cleanout installation (to facilitate installation of OPD only; permit not upgradable) $25 $25 no change Basic Application (side sewer work, easement staking, permit renewal) $153 $177 15.7% Existing parcel - new sewer service $248 $253 2.0% New parcel - new sewer service $331 $362 9.4% Commercial Application (includes up to one hour ° of plan review) $368 $379 3.0/° Commercial Application Plan Review-Additional hours, covers review of plans for a change in use or $174 $173 -0.6% expansion of a commercial facility, time in excess of one hour Capacity Use Charge Program $506 $521 3.0% Capacity Fee Installment Program and ° Promissory Note Program $506 $521 3.0/o Revised: 04/17/19 Attach 1 - Env Dev Rates Comparison 2019-03-15 Page 1 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 130 of 156 Page 23 of 29 (A-3) Reimbursement Accounts: Set-up fee $1,464 $1,444 -1.4% Transaction fee $221 $200 -9.5% (A-4) Special Studies: Base fee (4 hours plus misc. costs) $781 $775 -0.8% Each additional hour $171 $169 -1.2% Source Control Business Review- base fee, includes plan review, site visit and inspection time $1,017 $1,010 -0.7% up to four hours Source Control Business Review-each additional hour in excess of four hour base fee for plan review, $207 $205 -1.0% site visit and inspection time Grease Variance Review (includes site visit) $401 $411 2.5% Site Collector Plan Check $473 ELIMINATE N/A Source Control Enforcement Review and Inspection $566 $562 -0.7% (A-5) Private pumping system plan check- Commercial $809 $843 4.2% Outside Force Main Additional Review $367 $371 1.1% Private pumping system plan check- Residential $424 $460 8.5% (A-6) Annexation Fee (per District Code 6.08.030): New Annexations Actual Expenses Actual Expenses no change Annexation Recovery Fee $609 $667 9.5% (A-7) Special Approvals $426 $391 -8.2% Revised: 04/17/19 Attach 1 - Env Dev Rates Comparison 2019-03-15 Page 2 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 131 of 156 Page 24 of 29 ATTACHMENT 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMPARISON OF CURRENT & PROPOSED FEES & CHARGES FOR FY 2019-20 DRAFT CONSTRUCTION INSPECTION Inspection of new sewer main construction and new connections and other sewer work on private property(includes TV inspection when appropriate). (B-1) Mainline Inspection (contributed assets): Base Fee $915 $929 1.5% Per Foot Charge (in street) $14.38 $14.60 1.5% Per Foot Charge (in undeveloped land) $9.77 $9.92 1.5% New Manhole, Rodding Inlet $972 $1,050 8.0% (B-2) Inspections by type: Overflow Protection Device installation (OPD no charge no charge no change only) Side Sewer Cleanout installation (to facilitate installation of OPD only) $50 $50 no change Side Sewer Installation/ Repair per 100 feet: $243 $255 4.9% Single Inspection Charge (e.g. sewer connection; encroachment verification; side sewer cap on property; tap and lateral (new or replacement); air test; $243 $255 4.9% reinspection; homeowner preconstruction inspection) Manhole tap; lateral abandonment at main; pipe bursting; trash enclosure ° w/o trap; side sewer CIPP repair; outdoor grease $486 $510 4.9/° trap only Manhole Alteration; trash enclosure with trap; $729 $765 4.9% rease interceptor abandonment Outside pump installation $972 $1,020 4.9% New Manhole or Rodding Inlet(private) $972 $1,020 4.9% Grease/Sand /Oil Interceptor $1,458 $1,530 4.9% (B-3) Overtime inspection: First Hour(if responding from off-site) $123 $127 3.3% Every hour thereafter $80 $84 5.0% Weekend/Holiday(New Year's Day, Martin Luther King, President's Day, Memorial Day, July 4th, Labor Day, Veteran's $363 $379 4.4% Day, Thanksgiving, Christmas)- 4 hour minimum (B-4) Inspection of non-permitted work (+ any avoided $1,147 $1,140 -0.6% char es Revised: 04/17/19 Attach 1 - Env Dev Rates Comparison 2019-03-15 Page 3 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 132 of 156 Page 25 of 29 ATTACHMENT 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMPARISON OF CURRENT & PROPOSED FEES & CHARGES FOR FY 2019-20 DRAFT Fee Category Application of Fee (B-5) INSPECTION CHARGES FOR NEW CONNECTIONS (Informational Only) The following fees have been in effect since July 1, 2014. This information is to clarify how fees are applied and charged for new connections. This procedure coincides with the 2014 Update to the CCCSD Standard Specifications. Current procedure at the Permit Counter is to collect all connection and inspection fees for new construction when a structure's roof is on and the rough plumbing is installed ("Roof and Rough"). Under the new procedure, a developer can choose to: 1. Connect at Roof and Rough, or 2. Connect at building foundation following the procedures outlined in the 2014 Edition of the Standard Specifications. For either scenario, connection fees will be due and payable prior to permit issuance(consistent with CCCSD Standard Specifications Ed. 2011; Section 3-07 Payment of Fees and Charges.) The changes affect Category (B) Construction Inspection Section (B-2)and are shown below: Residential Connections (up to and including four units) at Roof and Rough: This fee is for inspection of new residential units connecting to CCCSD's mainline after the structure's roof is on and the rough plumbing has been installed. This $486 per unit $510 per unit 4.9% fee includes: one building connection inspection and one side sewer inspection (up to 100 feet). Additional inspections and related fees may be required. Residential Connections (up to and including four units) at building foundation: This fee is for inspection of new residential units connecting to CCCSD's mainline prior to structure being roofed and rough plumbing being installed. This fee o includes: one building connection inspection, one $972 per unit $1,020 per unit 4.9/o side sewer inspection (up to 100 feet), and two additional inspections as required per CCCSD Standard Specifications. Additional inspections and related fees maV be required. Commercial/Multiple Residential Connections (more than four units) at Roof and Rough: This fee is for inspection of new commercial or multiple residential units connecting to CCCSD's mainline after structure's roof is on and the rough plumbing $486 per unit $510 per unit 4.9% has been installed. This fee includes: one building connection inspection and one side sewer inspection (up to 100 feet). Additional inspections and related fees may be required. Revised: 04/17/19 Attach 1 - Env Dev Rates Comparison 2019-03-15 Page 4 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 133 of 156 Page 26 of 29 Commercial/Multiple Residential Connections (more than four units) at building foundation: This fee is for inspection of new commercial or multiple residential units connecting to CCCSD's mainline prior to structure being roofed and rough plumbing being installed. This fee includes: one $1,215 per unit $1,275 per unit 4.9% building connection inspection, one side sewer inspection (up to 100 feet), one pre-construction meeting, and two additional inspections as required per CCCSD Standard Specifications. Additional inspections and related fees may be required. Revised: 04/17/19 Attach 1 - Env Dev Rates Comparison 2019-03-15 Page 5 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 134 of 156 Page 27 of 29 ATTACHMENT 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMPARISON OF CURRENT & PROPOSED FEES & CHARGES FOR FY 2019-20 DRAFT Fee Category Current Fee Proposed Fee % Change COLLECTION TV inspection of sewers conducted separate from a construction inspection activity; verification of sewer location and sewer service connection. (C-1) TV Inspection: Weekday, hourly rate $294 $292 -0.7% Minimum Charge (2 hour minimum) $588 $584 -0.7% Overtime - First Hour $180 $186 3.3% Overtime - Each Additional Hour $140 $142 1.4% Overtime - Weekend / Holiday (4 hour minimum) $600 $612 2.0% (C-2) Dye test $363 $368 1.4% (C-3) Collection system repair Actual Expense Actual Expense no change (C-4) Cancelled TV Inspection without prior notice $537 $560 4.3% (C-5) Sewer locating and marking $333 $331 -0.6% • Establishing right-of-way agreements and resolving conflicts. (D-1) Process Quitclaim Deeds $1,417 $1,434 1.2% Process Quitclaim Deed - plat and legal by ° others $848 $960 13.2/o (D-2) Process Real Property Agreement, License, or Easement: Base Fee (minimum charge; includes sewer locating and marking) $1,164 $1,545 32.7% Each Additional Hour(after 2 hours) $183 $182 -0.5% (D-3) Right-of-way Research / Encroachment Resolution Actual Expense Actual Expense no change (D-4) Right of Entry/ Encroachment Permit Fee: Base Fee (minimum charge) $261 $273 4.6% Each Additional Hour(after 2 hours) N/A $182 N/A MISCELLANEOUS District services provided for private sewer projects; interest rates for CCCSD programs; copying fees. (E-1) Engineering - private sewer projects Actual Expense Actual Expense no change (E-2) Soil evaluation - private sewer projects Actual Expense Actual Expense no change (E-3) Surveying Actual Expense Actual Expense no change (E-4) Minimum annual interest rate for CADs and 6.00% no chan 6.00/° g Capacity Use Program e Revised: 04/17/19 Attach 1 - Env Dev Rates Comparison 2019-03-15 Page 6 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 135 of 156 Page 28 of 29 (E-5) Document/Plan Copying Fees: 8 1/2" x 11"; 8 1/2" x 14"; 11"x 17" (per $0.15 $0.15 no change sheet) 24"x 36" Plan (per sheet) $3.00 $3.00 no change CCCSD Standard Specifications $20.00 $20.00 no change Multiplier to be applied to Alhambra Valley Assessment District(AVAD) 2010-11 Parcel (E-6) Assessment Amount listed in Ordinance 262-Exhibit 1.04592 1.06032 1.4% B to determine AVAD Reimbursement Fee amounts applicable to connections in FY 2019-20. Multiplier to be applied to St. Mary's Road (E-7) Contractual Assessment District (CAD) 2011-1 0.95226 0.96536 1.4% Reimbursement Fees listed in Ordinance 279- Exhibit B. Applicable to connections in FY 2019-20. Revised: 04/17/19 Attach 1 - Env Dev Rates Comparison 2019-03-15 Page 7 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 136 of 156 Page 29 of 29 ATTACHMENT 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMPARISON OF CURRENT & PROPOSED FEES & CHARGES FOR FY 2019-20 DRAFT Fee Category Current Fee Proposed Fee % Change (F) INDUSTRIAL PERMIT FEES Permitting and inspection of industries and other commercial dischargers to ensure availability and use of pretreatment processes. Base permit fee of (F-1) Class I Fees $3,450 + cost of Actual Expense N/A District's lab analysis Base permit fee of Base permit fee of (F-2) Class 11 Fees $3,450 + cost of $3,780 + cost of 9.6% District's lab District's lab analysis analysis (F-3) Class III Fees $0 $0 no change (F-4) Industrial user permit application fee $0 $0 no change (F-5) Special discharge permit application fee (*): No on-site inspection, no capacity review $335 $344 2.7% On-site inspection $812 $838 3.2% Additional charge for capacity review (Required for $259 $266 2.7% dischar es >50 m DISPOSAL(G) SEPTAGE Sampling and disposal of septic waste and grease. (G-1) Annual permit fee $1,404 $1,410 0.4% (G-2) Residential septic/toilet waste: < 2,000 gallons $40 + $0.15/gal $40 + $0.15/gal. 0.0% > 2,000 gallons $80 + $0.15/gal $80 + $0.15/gal. 0.0% (G-3) Restaurant grease waste: < 2,000 gallons $40 + $0.03/gal $40 + $0.03/gal. 0.0% > 2,000 gallons $80 + $0.03/gal $80 + $0.03/gal. 0.0% (*)Additional charges to be billed separately if staff time incurred is above that included in the base fee. (**) Other approved waste will be charged at the residential septic and portable toilet waste rate unless actual strength characteristics are provided. Percent change in septage and restaurant grease fees based on an assumed volume of 2,000 gallons Revised: 04/17/19 Attach 1 - Env Dev Rates Comparison 2019-03-15 Page 8 April 23, 2019 Regular FINANCE Committee Meeting Agenda Packet- Page 137 of 156