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HomeMy WebLinkAbout10. Consider SSC relief program for schools and/or potentially other customer classes Page 1 of 14 Item 10. k�*k CENTRAL SAN CENTRAL CONTRA COSTA SANITARY DISTRICT1 May 21, 2020 TO: HONORABLE BOARD OF DIRECTORS FROM: DANEA GEMME LL, PLANNING AND DEVELOPMENT SERVICES DIVISION MANAGER REVIEWED BY: JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES KENTALM, DISTRICT COUNSEL ROGER S. BAILEY GENERAL MANAGER SUBJECT: CONSIDER SEWER SERVICE CHARGE RELIEF PROGRAM FOR SCHOOLS AND/OR POTENTIALLY OTHER CUSTOMER CLASSES Staff will review the attached presentation at the Board meeting for a proposed Customer Relief Program to address continuing impacts of the COVI D-19 pandemic. The two elements of the program include school rebates for those schools charged a per-student rate for the annual Sewer Service Charge and a targeted relief whereby commercial/industrial customers who can demonstrate that they were impacted can apply for relief. Strategic Plan Tie-In GOAL ONE: Provide Exceptional Customer Service Strategy 1 - Build external customer relationships and awareness, Strategy 3- Maintain a strong reputation in the community ATTACHMENTS: 1. Presentation 2. Customer Outreach Mailer 3. Customer Outreach Mailer including Commercial/I ndustrial Customers May 21, 2020 Regular Board Meeting Agenda Packet- Page 94 of 505 ATTACHMENT 1 / FISCAL YEAR 2020-21 I CUSTOMER RELIEF PROGRAM SEWER SERVICE CHARGE Danea Gemmell, PE Planning & Development Services Division Manager _ . May 21, 2020 Board Meeting PInTiMuff-M, FISCAL YEAR (FY) 2019-20 SCHOOL REBATES = Iz CENTRAL SAN z =._ 1 K-12 SCHOOLS -Approximately 130 school sites • Majority of sites are billed based on student count ■Elementary School rate based on 5 gallons per student per day ■Intermediate and High School rate based on 10 gallons per student per day ■2015 Cost of Service Study verified actual meter consumption vs. rate assumptions • Remaining school sites billed on actual consumption •School District offices and other non-school sites billed based on actual consumption ` 3 CENTRALSAN FY 2019-20 K-12 SCHOOLS REVENUE BREAKDOWN Schools billed by attendance $647,919 90.0% Schools billed by actual flow 39,455 5.5% District office, other non-school 32,238 4.5% Total $719,612 100.0% CENTRALSANI 2 STUDENT COUNT BASIS OF BILLING • Per-student rates based on full school year ■ 180 school days •Assume loss of 50 school days during FY 2019-20 ■ 28% reduction ■ COVID-related school closures started on March 16, 2020 •Total rebate would be approximately $180,000 A92IS CENTRALSAN RECOMMENDATION • Direct staff to calculate a 28% rebate for schools billed on a per-student basis. The rebate is based on the decreased number of school days in the FY 2019-20 school year due to the Shelter-at-Home order which began on or around March 16, 2020, and reflects the decreased benefit the schools received during that period. The rebate is to be applied to the FY 2020-21 charges. I) CENTRALSAN 3 NEXT STEPS IF BOARD APPROVES SCHOOL REBATES ✓ May 21 , 2020, Board Meeting: Consideration of School Rebates ❑ Calculate rebate for FY 2019-20 for schools billed on per capita basis ❑ Send letter to all affected schools eligible for rebate ❑ Include rebate credit on FY 2020-21 bills 1 , CENTRALSAN RECOMMENDED BOARD ACTION • Direct staff to calculate a rebate for schools billed on a per-student per-day basis for the FY 2019-20 school year due to the reduced number of school day attendance and apply this refund to the FY 2020-21 sewer service charges. CENTRALSANI 4 FY 2020-21 NON-RESIDENTIAL RELIEF Alm` 9 CENTRAL SAW- INTRODUCTION •Most non-residential customers are billed based on water consumption and business type •Time needed to receive water data and calculate annual bills means that customers who experience a drop in business in 2020 would not typically see a change in their sewer bill until Fall 2021 (FY 2021-22) •As requested by the Board on May 7, 2020, elements of a draft Customer Relief Program are outlined for consideration CENTRALSAN 5 ELEMENTS OF POTENTIAL PROGRAM • Customers experiencing a drop in water consumption beginning March 16, 2020: • Customers submit an application with documentation (2020 water bills) demonstrating impact • Application signed by property owner responsible for paying sewer service charges • Landlords will need to agree to equitably distribute credit in case of multiple tenants on a shared water meter • Amount of relief calculated for the period March—June 2020 • Minimum 20% drop in consumption during Shelter-in-Place period on a month-to-month comparison to 2019 consumption for the relief • Maximum relief available is approximately 33% of annual charge • One-time relief • FY 2021-22 sewer service charge (SSC) offset by amount of relief provided to prevent double credits l 11 CENTRALSAN RELIEF CALCULATIONS • For an "average" restaurant • $5,180 annual bill •Assume 75% reduction in flow for four-month period for restaurants •25% adjustment for 12-month period • $1,295 adjustment CENTRALSAN 6 CHALLENGE #1 : TIMING OF SEWER SERVICE CHARGES AND TIMING OF RELIEF FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Sewer Service Charge $17,122 $14,445 $16,046 $8,400* $17,599* Water Consumption(HCF) 1,626 1,350 1,425 713** 1,425*** CY 2017 CY 2018 CY 2019 CY 2020 CY 2021 consumption consumption consumption1, umption consumption Typical Data from 4,200 square-foot restaurant based on estimated consumption and rates approved in 2019 assume CY 2020 annual consumption is 50%of CY 2019 consumption ..* assume CY 2021 annual consumption returns to CY 2019 levels HCF—hundred cubic feet FY—fiscal year CY—calendar year AML,13 CENTRALSAN CHALLENGE #2: MIXED-USE METERS SHARED BY DIFFERING BUSINESS TYPES Medical Offices I - Entertainment Big 5 ` Restaurants Sporting Goods M M ., Barbers, Beauty Salons,Pet Grooming Armed Forces Taco Bell Career Center � '- Fresenius M - SAFE Credit Pho Lee Hoa Healing Hands Medical Care Union Pha'ti Restaurant Spa&Massage Mi Karaoke Lenny Craig M M Cosmo Prof M M O Q-Nails Domo Sushi Korean BBQExpress Hair PDllo Pollo Salon 7 NON-RESIDENTIAL CUSTOMER STATISTICS -Approximately 2,700 non-residential parcels billed in FY 2019-20. •Some parcels have more than one water meter (charges typically calculated based on water consumption and business type). •Approximately 4,400 non-residential water meters used in FY 2019-20 billing calculations. • Many water meters serve a mix of businesses. As an example, for restaurants: • 326 restaurant-only water meters • 163 additional meters with mix of restaurant and non- restaurant CENTRALSAN � 1s 65% OF NON-RESIDENTIAL PARCELS CHARGED $3,000 OR LESS • Average non-residential sewer bill is$6,897 per parcel • Median non-residential sewer bill is$1,564 per parcel • Similar long-tail distribution for most individual business categories Distribution of Non-Residential Sewer Service Charges 1200 1000 800 `0 600 E = 400 200 0,,p 11 le le l �tl" ,Ytl" ,�tl" ytl" ^tl" ��,Y�,��y�^�9�,Ytl' ,�@' y@' ,\@' 9@' l l O O O y. 1 1 1 1 1 'L 'L 'L 'L 'L ^' ^' ^' ', ', P P Pyr P1� P9� Annual Charge($) Source:FY 2019-20 tax roll file494 CENTRAL SAN 8 80% OF RESTAURANT PARCELS CHARGED LESS THAN $12,000 • 9 sites have bills larger than$30,000 Distribution of Restaurant Sewer Service Charges 80 70 60 50 40 30 z' 20 10 0 ry a & m Is.. 14 4 & .6 ry ry ry ry m v v e v Annual Bill($) M Source:FY 2019-20 tax roll file 17 CENTRALSAN HOTELS AND MOTELS Top 5 customers: Marriott Walnut Creek, Embassy Suites Walnut Creek, Lafayette Park Hotel, Extended Stay America(Bishop Ranch),and San Ramon Marriott Distribution of Hotel and Motel Sewer Service Charges (annual charge for rate class LH) 14 12 10 A g E 6 z' 4 2 L0 til tilC3" Ile ale y,Pte' , , , , Annual Sewer Service Charge($) _ II CENTRALSAN 9 FINANCIAL CONSIDERATIONS •Preliminary data from Contra Costa Water District suggests a 20% reduction in all commercial consumption based on April 2019 to April 2020 comparison meter reads -Analysis of Central San plant flows suggests a similar 20% reduction •Staff estimates maximum cost of program would be $3.6 million based on 20% water reduction and 100% of eligible parcels applying •Relief amount given would reset volume by same amount in the following year (FY 2021-22) to reflect normal consumption ` 19 CENTRALSAN CURRENT CENTRAL SAN SSC BILLING PROCESS • Central San receives water consumption information from water purveyors and posts it in SunGard where sewer service bills are calculated for each parcel • Bills are prepared/sent to property owner: • If billed through County, billing information is sent to County for inclusion on annual property tax bill • If billed directly, bill is prepared and sent to property owner by Planning &Development Services • Property owner receives and pays County/Central San • Up to the property owner to manage if/how billed amounts and credits are passed through to tenants and business owners • Industrial customer bills are calculated manually on a per- business basis �. CENTRALSAN 10 NEXT STEPS IF BOARD APPROVES TARGETED RELIEF PROGRAM ✓ May 21 , 2020, Board Meeting: Consideration of Non-Residential Relief Element needed to meet SSC billing deadlines ❑ Send letter to Tenants and Property Owners notifying of program with website link to application ❑ Staff determines eligibility from submitted applications and customer-furnished 2020 water bills If received: ❑ Prior to July 30, process adjustment to tax roll charges ❑August 1 to November 30, submit Form C to Assessor to adjust tax bill ❑After December 1, Central San to cut check* ` *Dates are preliminary and subject to change / 21 CENTRAL SAN BOARD DIRECTION IS NEEDED ALTERNATIVES FOR COMMERCIAL/INDUSTRIAL RELIEF 1. Stay the Course (Preferred Alternative) Customer will receive lower SSC in based on actual consumption in FY 2021-22. 2. Across the Board Reduction for all Commercial/Industrial Customers to reflect lower water consumption during Shelter- in-Place, which would be adjusted on the account during the billing process. 3. All Customers who submit an application and demonstrate an impact to their business, based on lower water consumption, would be provided relief on their FY 2020-21 SSC bill through an adjustment or refund. CENTRALSAN 11 Page 13 of 14 Customer Relief Program entral San understands that these are tough times for everyone, and we want to do our part to help alleviate a small bit of the hardships we all are facing. To that end, our Customer Relief Program provides savings on sewer service charges for some customers. Be assured that we continue working 24/7 to provide the essential wastewater collection and cleaning services that our customers rely upon. h To assist our residential o customers, we are waiving the ` _ b scheduled rate increase for { _ one year, resulting in about $30 in savings for every household. During Contra Costa County's Shelter-in-Place Order, most area construction, including our own critical infrastructure work and associated planning and operations efforts, was r slowed or halted for several weeks. Less construction has meant lower costs for Central San,and we are passing these R ' \ savings back to you, our customers. While $30 is not a big 1 `? number, we know every dollar counts right now, and this is something that we can do for our customers at this time.You do not need to request the credit;the savings will be applied automatically on your upcoming 2020-21 property tax bill. • • We are refunding sewer service charges to reflect a drop in _ water use for the time period when schools were closed, as well as waiving the scheduled rate increase for one year. In response to COVID-19, most of our local schools were closed for part of the school year.We are refunding the sewer _ service charge to schools in our service area for the time they �✓ f� - were closed and therefore not using our sewer services. ,, Central San will return approximately$180,000 to schools in our service area. In addition, we are waiving the scheduled ! rate increase, resulting in a savings of approximately 5% on the remaining charges. Schools do not need to request a refund or credit; both savings will be applied automatically to your bill. To learn more about Central San's modified operations in response to COVID-19,go to centralsan.org/Covid19 May 21, 2020 Regular Board Meeting Agenda Packet- Page 106 of 505 Page 14 of 14 Customer Relief Program = entral San understands that these are tough times for everyone,and we want to do our part to help alleviate a small bit of the hardships we all are facing. To that end, our Customer Relief Program provides savings on sewer service charges for some customers. Be assured that we continue working 24/7 to provide the essential wastewater collection and cleaning services that our customers rely upon. —91-- — 0 RESIDENTIAL SCHOOLS COMMERCIAL To assist our residential We are refunding sewer We are waiving the customers,we are waiving service charges to reflect scheduled rate increase the scheduled rate increase a drop in water use for the for one year for all for one year, resulting in time period when schools commercial customers, as about$30 in savings for were closed, as well as well as adjusting sewer every household. waiving the scheduled service charges to reflect During Contra Costa County's rate increase for one year. a drop in water use for Shelter-in-Place Order, most In response to COVID-19, most qualifying customers who area construction, including our of our local schools were closed experienced a drop in own critical infrastructure work for part of the school year. We usage due to COVID-19. and associated planning and are refunding the sewer service operations efforts, was slowed charge to schools in our service To assist local businesses, we or halted for several weeks. Less area for the time they were are waiving the scheduled rate construction has meant lower closed and therefore not using increase for all our commercial costs for Central San, and we are our sewer services. Central customers this year, resulting in passing these savings back to San will return approximately a savings of approximately 5% you, our customers. While $30 $180,000 to schools in our of your regular sewer service is not a big number, we know service area. In addition, we charges. These savings will be eve dollar counts right now, applied automatically to your every g are waiving the scheduled rate and this is something that we can increase, resulting in a savings bill. In addition, we will furtheradjust the charges for commercial do for our customers at this time. of approximately 5% on the customers who saw a drop in their You do not need to request the remaining charges. Schools do credit; the savings will be applied not need to request a refund water usage and associated sewer automatically on your upcoming or credit; both savings will be usage from March-May 2020 2020-21 property tax bill. applied automatically to your bill. due to COVID-19 and/or Contra Costa County's Shelter-in-Place Order. For example, if a restaurant was closed and not using water during this time,their sewer usage would also be adjusted. If your S = business saw a significant drop in water usage due to COVID-19, you may qualify for this additional adjustment of up to 25%. For more information and to ' apply, please visit: centralsan.org/[link] To learn more about Central San's modified operations in response to =. May 21, 2020 Regular Board Meeting Agenda Packet- Page 107 of 505 CovIo-19,go to centralsan.org/Covid19