The URL can be used to link to this page

Home My WebLink About07. Conduct public hearing to consider previously approved rate increase to the FY 2021-22 Sewer Service Charge Page 1 of 7 Item 7. Algi CENTRAL SAN BOARD OF DIRECTORS WE VS.101 M POSITION PAPER MEETING DATE: APRIL 15, 2021 SUBJECT: CONDUCTA PUBLIC HEARING INACCORDANCE WITH ORDINANCE NO. 304 TO CONSIDER THE FINANCIAL CONDITION OF CENTRAL SAN WITH RESPECT TO THE CURRENT NEED FOR THE PREVIOUSLYADOPTED FISCAL YEAR (FY) 2021-22 SEWER SERVICE CHARGE (SSC) RATE OF $660 FOR ASINGLE-FAMILY RESIDENCE AND FY2021-22 RATES FOR OTHER USER GROUPS SUBMITTED BY: INITIATING DEPARTMENT: DANEA GEMMELL, PLANNING AND ENG-PDS-DIVISION MANAGER DEVELOPMENT SERVICES DIVISION MANAGER KEVIN MIZUNO, FINANCE MANAGER REVIEWED BY: JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES PHILIP R. LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION Roger S. Bailey Kenton L. Alm General Manager District Counsel ISSUE Ordinance No. 304 requires that the Board of Directors hold a public hearing to consider Central San's current financial condition prior to imposing the previously approved SSC rate for FY 2021-22. BACKGROUND On April 18, 2019, the Board of Directors adopted Ordinance No. 304 which approved rate increases to the annual SSC effective July 1, 2019; July 1, 2020; J my 1, 2021; and July 1, 2022. Per that approved April 15, 2021 Regular Board Meeting Agenda Packet- Page 51 of 185 Page 2 of 7 rate schedule, the SSC rate for July 1, 2021 for single family homes is increased by$31 to $660 per year (residential rates are rounded to the nearest whole dollar). Rates for other user groups are found in the following table: Fiscal Year Fiscal Year Fiscal Year User Group 2020-21 2021-22 2022-23 Residential (rate per Residential Unit): Single Family Dwellings $629.00 $660.00 $690.00 Apartments, Condominiums, Duplexes, Second Living Units, Mobile Homes $596.00 $625.00 $654.00 Commercial / Non-I ndustrial (rates per hundred cubic feet): Low Strength $6.56 $6.87 $7.20 Medium-Low Strength $8.05 $8.43 $8.83 Medium Strength $10.09 $10.57 $11.07 Medium-High Strength $11.26 $11.79 $12.35 High Strength $14.92 $15.63 $16.37 Minimum Annual Charge (per parcel) $596.00 $625.00 $654.00 Ordinance No. 304 requires that prior to imposing the rate increase: "The Board of Directors shall consider, at a noticed public hearing each year prior to June 30, Central San's proposed budget, its financial condition, projected capital and operations and maintenance costs, as well as other factors which bear on Central San's revenue requirements to determine whether the increased amounts set forth herein for each fiscal year are still necessary. If the Board concludes by a majority vote that sewer service charges for less than the amount set forth in this ordinance for that fiscal year will produce adequate revenues for the fiscal year, the Board may, by resolution, fix the sewer service charges for that fiscal year to be imposed at appropriate amounts up to the maximum of the rates set forth herein without an amendment of this ordinance. I n such case, the resolution shall clearly set forth such lesser charges that are to be imposed and those charges shall remain in place until further action of the Board. If the Board determines the rates set forth in the table are appropriate for imposition in that fiscal year, no further action of the Board shall be required." On March 25, 2021, a Financial Planning Workshop was held with staff and the Board of Directors which reviewed the elements noted above, including Central San's current financial position, projected costs, the updated Ten-Year Capital Improvement Plan (CI P), and various options for financing the increased spending associated with the CI P. The Board of Directors gave direction to staff to proceed with updates to the financial plan and budget assuming maintaining the previously approved SSC rates for FY 2021-22. ALT ERNAT IVES/CONSIDERAT IONS After reviewing Central San's current financial condition and receiving any public input, the Board of Directors could: • Take no action, thereby imposing the previously approved SSC rate increase for FY 2021-22, • I mpose a rate increase in a lesser amount, or • Take some other action. April 15, 2021 Regular Board Meeting Agenda Packet- Page 52 of 185 Page 3 of 7 FINANCIAL IMPACTS Unless other action is taken by the Board of Directors, the previously approved rate increase will provide an estimated $6.57 million in additional revenue over FY 2020-21. This would allow for increasing the investment in infrastructure replacement, compliance with financial reserve policy requirements, moderate and stable rate increases in future years, recognition of continuing inflationary impacts to overall costs. COMMITTEE RECOMMENDATION The matter was not reviewed by a Board Committee. The entire Board of Directors provided comments at the March 25, 2021 Financial Planning Workshop. RECOMMENDED BOARD ACTION Review Central San's current financial condition. Hold the public hearing and receive any public input. Take no additional action and, thereby, impose the previously approved SSC rate increase of$660 for a single- family residence and FY 2021-22 rates for all other user groups. Strategic Plan Tie-In GOAL THREE:Fiscal Responsibility Strategy 1—Maintain financial stability and sustainability, Strategy 2—Ensure integrity and transparency in financial management ATTACHMENTS: 1. Presentation April 15, 2021 Regular Board Meeting Agenda Packet- Page 53 of 185 Page 4 of 7 FISCAL YEAR 2021 -22 I� Y SEWER SERVICE CHARGE Public Hearing April 15, 2021 Board Meeting SUMMARY OF ADOPTED SEWER SERVICE CHARGE (SSC) RATES • Board of Directors approved a 4-year schedule of SSC rates in April 2019. • Rate ordinance requirements include annual reviews to determine if adjustments are needed followed by an annual public hearing. CENTRALSAN 1 April 15, 2021 Regular Board Meeting Agenda Packet- Page 54 of 185 Page 5 of 7 APPROVED 4-YEAR SSC RATES (FISCAL YEAR (FY) 2019-20 To FY 2022-23) $1,000 $31 not collected $9DD $823 $848 approved $799 $629 $776 (*3%) $SDO $777 $746 (+4%1 (.395) r (+4%} I I I effective $690 (.d%1 r—1 I I I I I $700 $S98 $660 $598 I+ $600 I I J I I I I I I I I j $500 I I I I I I I I $4Dn I I I I I I I I I I I I $3DD I I I I I I I I I I I I I I I j $200 I I I I I I I I I I I I r $0 I_ L_I I_ I_J I I I 2019-20 2020-21 2021-22 2022-23 202324 202425 202526 2026-27 2027-28 2029-29 ■Approved Single-Fam ilY Rate 13Not Collected C,Planned ` 3 CENTRALSAN OUR RATES CONTINUE TO BE BELOW THE AVERAGE San Francisco{Sf PUC] Berkeley IEBMOD for treatment] Santa Rosa Petaluma Benlnia Rodeo Sanitary District RitbmOnd Oakland(EBMUDbrtreatmert) Crockett Sanitary Department 511 n Leandro[EBMuO for treatment] Napa Sanitation District average Average of Agencies Surveyed Va11ejo5anitatlonand Flood Control Livermore Mt,lew sari1,iq District Central San PROPOSED FY 2021-22 Central San FY 2021-22(approved April 2019) Novato Sanitary District Brennyood Median Median of Agencies Surveyed Concord ICCCSD for treatment] sunnyvale west cnnnty wastewater Dismet Central San(p—lausly approved) Central 5an FY202C-21approved stege 51)111 MUDtor treatment] Pittsbo rg(Delta Diablo for treatment] Central San(collected) Central San FY 202°-21 collected Antixh(De Ra Diablo for treatm.) Bay Point[Deltafi Diablo r treatment] F3irnel d-Suiwn Sealer District San lose Pleasanton(DSRSDtortreatment) Dublin San Ramon Services District Castro V alley S an i"y Distr ict Union Sanitary Distrla Dayaaard Oro Loma Sanitary Distria $0 $zoo $400 $500 We $1,000 $1,200 $1,400 $1,6Do $1,800 FY 2020-21 Annual Charge per Single-Family Home „) CENTRALSAN 2 April 15, 2021 Regular Board Meeting Agenda Packet- Page 55 of 185 Page 6 of 7 RATE COMPARISON INCLUDING PROPERTY TAX san Francisrn issPucl eerkeley fEeMUD ror treafinemh Sand Rasa Petaluma Rodeo Sanilaryeislric[ Ben is GM4e1[Sanitary Depdflmenl ahhmmtl DdWdnd)faMDD 16f Ir¢a1TPnlh San LeantlrP iEBMDD to treatment) Average D Average of Agencies Surveyed central Central San FY 2021-22)appWed April 2019) rrnam Anilary Disvrzt ruga 5anidtion DZid VaEklo Sanitation and Hootl Control fentral 1.Iprev Wnsly apprwedl Central San FY 2020.21 approved M t Mew Sandary Ohlr,I Llvnmare Mediar� I Median of Agencies 5u rveyed central San)mllecletlh Central5an FY 202021 mEleRed Stege 50)EaMUD IM tf¢almenll Wes[County Wastewater District erentwonn Piffiho ra(-a Diablo Im trealmenlh [aneord face 1n 4earmPntl nny,•ae antmrn�cem Dranlo Iprlr¢almeml gaY Point)Dela Dablo fw treatmenth ■FY 202D 215ewer Servke 11a F,hfieltl-sulsun sewer Disbiet Gstra Valley 5annvy Dhokl SIO ■Cenbal san San I— ■Averag,, Median PlPdsa¢ta0 Jr..rM tre Holm) p¢5 fi..d pfdP¢flY fak Dublin San ks—Services rasbict Union Sa KE Dislact rrayxard � Dro Loma Sanila,Disbict $D 5100 saoD 5¢Do Sono SLODo StaDD $;aoo $4¢Do S1,aaD FY 2020-21 Annual Charge per Single-Family Home oil 5 CENTRALSAN STAFF RECOMMENDATION: ADOPTION OF PREVIOUSLY APPROVED SEWER SERVICE CHARGE RATES Conduct a public hearing in accordance with Ordinance No. 304 to consider the financial condition of Central San with respect to the current need for the previously adopted 4.9% Sewer Service Charge rate increase for FY 2021-22. Staff Recommendation (Motion Required): Leave unchanged the published rate of$660 per Single- Family residence for FY 2021-22. 6 CENTRAL SAN 3 April 15, 2021 Regular Board Meeting Agenda Packet- Page 56 of 185 Page 7 of 7 QUESTIONS CENTRALSAN S.. 4 April 15, 2021 Regular Board Meeting Agenda Packet- Page 57 of 185