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Home My WebLink About07. Conduct hearing to consider appeal re capacity fees-Bolani Flatbread in Concord Page 1 of 5 Item 7. Algi CENTRAL SAN BOARD OF DIRECTORS WE VS.101 M POSITION PAPER MEETING DATE: FEBRUARY4, 2021 SUBJECT: CONDUCTA HEARING TO CONSIDERAPPEAL OFASTAFF DECISION REGARDI NG A REQUEST TO ALLOW PAYMENT OF $43,368 IN CAPACITY FEES FOR 5133 PORT CHICAGO HIGHWAY I N CONCORD OVER A 15- YEAR PERIOD SUBMITTED BY: INITIATING DEPARTMENT: BRYAN MCGLOIN, MANAGEMENT ANALYST ENGINEERING AND TECHNICAL SERVICES- PDS-RATES AND FEES REVIEWED BY: THOMAS BRIGHTBILL, SENIOR ENGINEER DANEA GEMMELL, PLANNING AND DEVELOPMENT SERVICES DIVISION MANAGER JEAN-MARC PETIT, DIRECTOR OF ENGINEERINGAND TECHNICAL SERVICES Roger S. Bailey General Manager ISSUE An applicant (a new tenant) requested to pay additional Capacity Fees for a change of use over a fifteen- year period. The project does not meet the criteria for the Capacity Use Charge Program. District Code does not allow for payment of Capacity Fees in the requested manner, so staff believed they had no authority to enter into an agreement for a payment plan and denied the request. District Code Section 1.16.020 allows the appeal of a staff decision to the Board of Directors. BACKGROUND This appeal is a request for special consideration for payment of sewer Capacity Fees due for a proposed project at 5133 Port Chicago Highway in Concord. February 4, 2021 Regular Board Meeting Agenda Packet- Page 47 of 104 Page 2 of 5 Parcel History The parcel contains a single building with multiple tenants in separate suites. It is currently entitled at the "light industrial/warehouse" rate. Current Project On October 5, 2020, Central San received an application for proposed tenant improvements at 5133 Port Chicago Highway in Concord. After some conversations and correspondence with the applicant regarding the planned use of the space, Planning and Development staff calculated a capacity fee of $43,368 for the proposed project based on the current project square footage and the proposed business classification of "deli". The applicant has stated that their business will prepare sauces from scratch and will brown bread which has been baked off-site. "Deli" is Central San's lowest standard Capacity Fee factor which takes into account the higher strength wastewater associated with the preparation of food. Staff offered the applicant the option of a Special Study under District Code which would monitor wastewater flow and strength from the business to more accurately determine the Capacity Fee and the applicant declined. Staff has informed the applicant that the "deli" classification does not include any on- site baking and that if the business were to expand to include on-site baking, an additional Capacity Fee would be owed as the wastewater associated with baking is the highest strength on Central San's schedule of Capacity Fees. The $43,368 fee includes credit for the suite at the "light industrial/warehouse" rate based on previous fee assessments. District Code Section 6.12.070 states that Capacity Fees are credited at the current rates. This project does not meet the minimum "initial payment" threshold for the Capacity Use Charge Program contained in District Code section 6.12.050 H. The Capacity Use Charge Program allows certain users with high Capacity Fees to pay those fees over 15 years. Fee Payment Discussions The applicant indicated that payment of the $43,368 in full was problematic and asked about payment options. Staff asked the applicant to contact the property owner and determine if the owner was willing to participate in a financing agreement which would allow Central San to collect payments on the property tax bill; the owner has indicated his willingness to participate in this type of arrangement. On January 12, 2021, staff notified the applicant of the final determination that$43,368 in Capacity Fees were owed for the project. On January 13, 2021, Annie Johnson, Office Manager for the applicant, requested in writing that they be allowed to pay the $43,368 fee over fifteen years. Staff's understanding is that the payment agreement requested by the applicant would be as follows: $13,010 (30% of the amount due) upon approval by the Board of Directors, and $3,125 each year thereafter, collected through the property tax roll. ALTERNATIVES/CONSIDERATIONS The Board of Directors could: a. Grant the request, waive the time of payment requirements in District Code Section 6.12.030, and allow the applicant to pay 30% down with the balance payable over fifteen years at an annual interest rate of 6%, resulting in a down payment of $13,010 and annual payments of $3,125; or b. Deny the request and require payment of the full $43,368 prior to approving the plans for the project; or c. Provide other direction to staff. February 4, 2021 Regular Board Meeting Agenda Packet- Page 48 of 104 Page 3 of 5 FINANCIAL IMPACTS If Central San enters into an installment payment agreement with the business owner, the Capacity Fees currently due of $43,368 would be collected over fifteen years, including 6% interest which results in a total collection of $56,760, an additional $13,392. It is possible that the business could close or relocate before payments are completed. If that happens, staff would calculate the Residential Unit Equivalent (RUE) of the capacity fees collected up to that point and would credit those RUEs to the property. A subsequent business in the same location would then be required to pay any additional Capacity Fees due, either upon opening or under an arrangement such as a Capacity Use Charge Agreement. COMMITTEE RECOMMENDATION District Code Section 1.16.030 states that appeals of staff decisions are to be heard "at a regular meeting of the Board of Directors." Therefore, this matter was not reviewed by a Board Committee. RECOMMENDED BOARD ACTION Hear the appeal and provide direction to staff. Strategic Plan Tie-In GOAL THREE:Fiscal Responsibility Strategy 1—Maintain financial stability and sustainability ATTACHMENTS: 1. Presentation February 4, 2021 Regular Board Meeting Agenda Packet- Page 49 of 104 ag 1-. „4 Item 7. (Handout) (As presented at meeting) APPEAL OF STAFF DECISION : GoHIGHWAY,RTP HI A 5133 o C c (BOLANI FLATBREAD) r. Board Meeting February 4, 2021 Danea Gemmell Planning and Development Services Division Manager - � CENTRALSAN APPEAL OF STAFF DECISION : BOLAM FLATBREAD • Central San received an application for tenant improvements at 5133 Port Chicago Highway in Concord and calculated $43,368 in capacity fees due. • Preparation of food on-site results in a change in use from "light industrial/warehouse" to "deli". • The applicant requested the ability to pay Capacity Fees over time. • The Capacity Use Charge Program (District Code 6. 12.050 H) allows users with Capacity Fees greater than the deli rate to pay those fees over 15 years. • The applicant is appealing staff's decision to the Board of Directors in order to allow a similar financing arrangement. JML2 CURRENT DISTRICT CODE ALLOWS FOR FINANCING CAPACITY FEES FOR SOME BUSINESS TYPES 6.12.050 - NONRESIDENTIAL CAPACITY FEES. H . Capacity Use Charge Program. 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 use charge program was established to allow for time payment of capacity fees. Only the gravity capacity fee, as set forth more fully in Section 6. 12.080 (Schedule of capacity fees, rates and charges), is eligible for the capacity use charge program. The pumping capacity fee is not included in the capacity use charge program. To implement the program the Board of Directors adopted, as part of the schedule of capacity fees, rates and charges in Section 6. 12.080, a capacity fee RUE factor for a minimum "initial payment" threshold. The capacity use charge program includes all user groups whose facilities capacity fee RUE factor exceeds the minimum "initial payment" factor. Participation in the capacity use charge program shall be at the option of the user, with the concurrence o the parcel owner. SCHEDULE OF CAPACITY FEES, RATES AND CHARGES SETS THE INITIAL PAYMENT AMOUNT Capacity Use Charge Program The minimum "initial payment"threshold gravity capacity fee RUE factor shall be 1.562 RUE/per one thousand square feet. Capacity Charge Capacity Use "Initial Payment" Charge Rates Pumping Gravity Capacity Current Year Capacity Fee Fee RUE ($/Month RUE Factor Factor 1,000 Sq. Ft.) Use (RUE/1,000 (RUE/1,000 Annual Code User Group Sq. Ft.) Sq. Ft. ($/HCF AC Car washes 1.562 21.829 $1,142.03 $6.15 AW Car washes with recycling 1.562 3.805 $ 114.41 $3.70 61- Laundromats 1.562 14.594 $ 697.10 $5.87 HP Hospitals 1.562 3.124 $ 77.58 $3.05 LH Hotel/Motel 1.562 1.926 $ 21.25 $2.05 RB Bakeries retail 1.562 2.178 $ 145.87 $8.23 RS Restaurants(dine-in) 1.562 2.738 $ 142.89 $6.42 RT Restaurants(paper 1.562 2.738 service/no dishwashers) $ 142.89 $6.42 SF Skilled nursing facilities 1.562 2.347 $ 38.17 $1.96 CENTI ■ , APPEAL OF STAFF DECISION : BOLAM FLATBREAD • The Board of Directors could: a) Grant the request, waive the time of payment requirements in District Code Section 6. 12.030, and allow the applicant to pay 30% down with the balance payable over fifteen years at an annual interest rate of 6%, resulting in a down payment of $13,010 and annual payments of $3, 125; or b) Deny the request and require payment of the full $43,368 prior to approving the plans for the project; or c) Provide other direction to staff. JML5