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HomeMy WebLinkAbout04.c. Review draft Position Paper to conduct a public hearing to receive public comment and consider adopting the following ordinances to become effective July 1, 2021: Page 1 of 38 Item 4.c. BOARD OF DIRECTORS 20L POSITION PAPER MEETING DATE: APRIL 27, 2021 SUBJECT: REVIEW DRAFT POSITION PAPER TO CONDUCTA PUBLIC HEARING TO RECEIVE PUBLIC COMMENTAND CONSIDER ADOPTING THE FOLLOWING ORDINANCES TO BECOME EFFECTIVE JULY 1, 2021: • UNCODIFIED ORDINANCE NO. AMENDING THE SCHEDULE OF CAPACITYFEES, RATES AND CHARGES, REPLACING ORDINANCE NO. 309 INACCORDANCE WITH DISTRICT CODE CHAPTER 6.12; AND • UNCODIFIED ORDINANCE NO. AMENDING THE SCHEDULE OF ENVIRONMENTAL AND DEVELOPMENT-RELATED FEES AND CHARGES, REPLACING ORDINANCE NO. 310 INACCORDANCE WITH DISTRICT CODE CHAPTER 6.30 DATA ISAVAILABLE,AS REQUIRED BY GOVERNMENT CODE TITLE 7, DIVISION 1, CHAPTER 8, SECTION 66016. IF YOU HAVE QUESTIONS, PLEASE CONTACT SENIOR ENGINEER THOMAS BRIGHTBILL BYE- MAILAT TBRIGHTBILL@CENTRAL SAN.ORG SUBMITTED BY: INITIATING DEPARTMENT: BRYAN MCGLOIN, MANAGEMENT ANALYST ENGINEERING AND TECHNICAL SERVICES- THOMAS BRIGHTBILL, SENIOR ENGINEER, PDS-RATES AND FEES FINANCIAL PLANNING 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 require 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. BACKGROUND Capacity Fees April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 110 of 217 Page 2 of 38 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 Service $6,803 per RUE* $7,351 per RUE 8.1% Pumping Service $8,388 per RUE $9,042 per RUE 7.8% *RUE = Residential Unit Equivalent Environmental and Development-Related Fees and Charges Chapter 6.30 of the District Code includes provisions for the Board of Directors (Board)to adopt an uncodified 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 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, 19 charges would increase, and 48 charges would decrease with 1 new fee and 2 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, 2020 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, 2020 would continue. This is not recommended as Central San would not fully recover costs expended in providing the corresponding environmental and development-related services. FINANCIAL IMPACTS If the recommended Capacity Fees are adopted, staff estimates that approximately$400,000 in additional capacity fee revenue would be generated by the change in fiscal year(FY) 2021-22, assuming a projected additional development of 700 RUEs. 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 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 111 of 217 Page 3 of 38 and Development-Related Fees and Charges are adopted, staff estimates a decrease of $70,000 in Permit & Inspection Fee revenue in FY 2021-22. This projection is based on the range of increases shown in the attached staff report and assumes that the level of development would be relatively consistent with that of the current fiscal year due to improving economic conditions. COMMUNITY OUTREACH Staff will conduct 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 in the Contra Costa Times and San Ramon Valley Times. I n addition, approximately 400 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. (To be updated for the Board meeting scheduled for J une 3, 2021) "As of May 14, 2021, no stakeholders nor members of the public had contacted Central San with comments.Any comments received after May 14, 2021 will be presented to the Board of Directors at the public hearing." COMMITTEE RECOMMENDATION The Finance Committee reviewed this item at its April 27, 2021 meeting and recommended 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, 2021, which includes the following findings: • Central San has made a substantial investment in assets that will benefit new users. • 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 balance in the Sewer Construction 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, 2021, including the following findings: o Central San incurs substantial costs to provide environmental and development-related April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 112 of 217 Page 4 of 38 services. • It is necessary to charge customers and other users to recover the reasonable cost of providing the services. • The proposed fees and charges reasonably represent Central San's actual costs to provide the services. • The proposed fees and charges are exempt from CEQA. (Four affirmative votes are required for adoption.) 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 A. Proposed Capacity Fee Ordinance 1 B. Exhibit A to Proposed Capacity Fee Ordinance 1 C. Report Regarding Capacity Fee Update 1 D. Table 1 to Report 1 E. Table 2 to Report 1 F. Table 3 to Report 2A. Proposed Environmental & Development-Related Fee Ordinance 2B. Exhibit Ato Proposed Environmental & Development-Related Fee Ordinance 2C. Report Regarding Environmental & Development-Related Fee Update 2D. Attachment 1 to Report April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 113 of 217 Page 5 of 38 ATTACHMENT 1A 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 2020-21 Budget," and the Staff Report on Proposed Capacity Fee Program dated April 8, 2021; 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 3, 2021 , 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 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 114 of 217 Page 6 of 38 Ordinance No. Page 2 of 3 Central Contra Costa Sanitary District 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 balance in the Sewer Construction 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 Directors of the Central Contra Costa Sanitary District 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. 309 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. 309 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 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. April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 115 of 217 Page 7 of 38 Ordinance No. Page 3 of 3 Central Contra Costa Sanitary District 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, 2021. PASSED AND ADOPTED this 3rd day of June, 2021 by the Board of Directors of the Central Contra Costa Sanitary District by the following vote: AYES: Members: NOES: Members: ABSENT: Members: Tad J. Pilecki 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 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 116 of 217 Page 8 of 38 ATTACHMENT 1 B EXHIBIT "A" SCHEDULE OF CAPACITY FEES, RATES AND CHARGES (Uncodified) The Capacity Fees, Rates and Charges listed below were established by Central Contra Costa Sanitary District Ordinance No. adopted June 3, 2021. These fees, rates and charges shall be applied to all new connections or added burdens for which fees become due and payable on or after July 1, 2021 in accordance with the provisions of District Code Chapter 6.12. Gravity Capacity Fee $7,351 / RUE* Pumping Capacity Fee $1,691 / RUE *A residential unit equivalent (RUE) is a measure of sewage volume and strength equivalent to a typical residential household. Gravity Zone Fee (Zone 1) = Gravity Capacity Fee Pumped Zone Fee (Zone 2) = Gravity Capacity Fee + Pumping Capacity Fee Residential Unit Equivalence (RUE) Factors0) Number of RUE = Unit of Measure Count Multiplied by the RUE Factor Use Unit of Gravity Pumping Code User Group Measurre(2) Capacity Fee Capacity Fee RUE Factor RUE Factor LU Single-family residences Dwelling Unit 1.000 1.000 LA Multiple-family residences, apartments Dwelling Unit 0.847 0.847 LD Duplex Dwelling Unit 0.847 0.847 LM Mobile homes Dwelling Unit 0.847 0.847 LT Condominium Dwelling Unit 0.847 0.847 LS Accessory structure connected Dwelling Unit 0.847 0.847 to sewer on same parcel with Single-family residence (not meeting Accessory Dwelling Unit(3) criteria LE Accessory Dwelling Unit(')— Dwelling Unit 0 0 within existing space LN Accessory Dwelling Unit(3)— 1,000 square 0.425 0.425 new structure feet (sq. ft. LC Common areas 1,000 sq. ft. 0.200 0.200 Page 1 of 5 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 117 of 217 Page 9 of 38 Residential Unit Equivalence (RUE) Factors') Number of RUE = Unit of Measure Count Multiplied by the RUE Factor Use Unit of Gravity Pumping Code User Group Measurre(2) Capacity Fee Capacity Fee RUE Factor RUE Factor AB Auto body/ painting 1,000 sq. ft. 0.484 0.467 AD Auto dealerships 1,000 sq. ft. 0.484 0.467 AL Aircraft services 1,000 sq. ft. 0.484 0.467 AR Auto repair/ maintenance 1,000 sq. ft. 0.484 0.467 AS Service stations 1,000 sq. ft. 0.484 0.467 BT Transportation services 1,000 sq. ft. 0.432 0.467 AC Car washes 1,000 sq. ft. 21.127 22.829 AW Car washes with recycling 1,000 sq. ft. 3.522 3.805 Barbers / beauty salons / pet BB grooming 1,000 sq. ft. 0.725 0.783 BC Dry cleaners, no laundry 1,000 sq. ft. 0.259 0.279 BR Retail sales 1,000 sq. ft. 0.259 0.279 Equipment repair/ repair services BE 1,000 sq. ft. 0.228 0.247 Contractors / business services BK 1,000 sq. ft. 0.228 0.247 BIN Nurseries / lumberyards 1,000 sq. ft. 0.228 0.247 IL Light industrial 1,000 sq. ft. 0.228 0.247 BH Meeting halls/studios 1,000 sq. ft. 0.290 0.313 EA Auditoriums/theaters 1,000 sq. ft. 0.290 0.313 EC Cinemas 1,000 sq. ft. 0.290 0.313 EM Entertainment 1,000 sq. ft. 0.290 0.313 EB Bowling alleys 1,000 sq. ft. 0.311 0.336 BZ Miscellaneous commercial 1,000 sq. ft. 0.510 0.551 EG Golf courses/country clubs 1,000 sq. ft. 1.166 1.391 EH Health clubs/ spas 1,000 sq. ft. 1.166 1.391 ET Tennis clubs 1,000 sq. ft. 1.166 1.391 IW Warehouses 1,000 sq. ft. 0.136 0.147 BM Markets 1,000 sq. ft. 0.556 0.601 BS Supermarkets 1,000 sq. ft. 0.880 0.601 BX Shopping centers 1,000 sq. ft. 1.057 1.142 OB Business offices 1,000 sq. ft. 0.295 0.319 OF Financial institutions / banks 1,000 sq. ft. 0.295 0.319 OG Government offices 1,000 sq. ft. 0.295 0.319 OS Fraternal /service offices 1,000 sq. ft. 0.295 0.319 OM Medical offices 1,000 sq. ft. 0.637 0.688 OV Veterinary clinics 1,000 sq. ft. 0.637 0.688 RD Delicatessens 1,000 sq. ft. 1.562 1.294 RN Bars 1,000 sq. ft. 1.562 1.294 Page 2 of 5 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 118 of 217 Page 10 of 38 Residential Unit Equivalence (RUE) Factors') Number of RUE = Unit of Measure Count Multiplied by the RUE Factor Use Gravity Pumping Code User Group Unit of Capacity Fee Capacity Fee Measure(2) RUE Factor RUE Factor RI Ice cream parlors 1,000 sq. ft. 1.562 1.294 RY Yogurt shops 1,000 sq. ft. 1.562 1.294 IRS Restaurants dine-in 1,000 sq. ft. 4.010 2.738 RT Restaurants take-out 1,000 sq. ft. 4.010 2.738 Patio seating in excess of 300 RC square feet(4), banquet facilities 1,000 sq. ft. 1.166 0.825 RB Bakeries retail 1,000 sq. ft. 4.061 2.178 BL Laundromats 1,000 sq. ft. 13.506 14.594 SF Skilled nursing facilities 1,000 sq. ft. 2.216 2.347 Residential care facilities for the FE elderly 1,000 sq. ft. 0.932 0.987 HP Hospitals 1,000 sq. ft. 2.891 3.124 LH Hotels / motels 1,000 sq. ft. 1.926 1.272 CH Churches 1,000 sq. ft. 0.242 0.261 Schools with cafeteria and gym / showers Classroom 0.860 1.000 Schools with gym / showers and no cafeteria Classroom 0.774 0.900 Schools with cafeteria and no m /showers Classroom 0.516 0.600 Schools without cafeteria or gym /showers Classroom 0.430 0.500 (1) Fees for multi-use buildings shall be determined by considering each use separately. (2) "Unit-of-measure" shall mean the basic unit that quantifies the degree of use of a particular parcel (e.g. dwelling unit, square footage). Square footage of an improvement shall be based upon the gross exterior dimensions of the structure. (3)Accessory Dwelling Units are 1,200 sq. ft. maximum and meet criteria of Gov't Code Sect 65852.2. (4) Patio seating capacity fees charged for patios at Dine-in Restaurants (RS) and Bars (RN). Page 3 of 5 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 119 of 217 Page 11 of 38 SCHEDULE OF CAPACITY FEES, RATES AND CHARGES — CONTINUED Special Studies The fees for Special Studies shall be as established in the Schedule of Environmental and Development-Related Fees, Rates and Charges pursuant to the provisions of Chapter 6.30 of the District Code. The following user groups require a special study to determine the appropriate capacity fees. Administrative fees to conduct special studies for these user groups shall be waived. Use Code User Group BP Parking lots CM Cemeteries MO Mortuaries with embalming or cremation facilities EP Parks / playgrounds ES Swimming pools EF Large fitness / athletic clubs LR Residence hotels IE Electronic industries IH Heavy industries IP Permitted industries IR Laboratories / research facilities -- Improvements with garbage disposals -- Public facilities -- Special billings -- Utilities Values for use in the RUE formula in Section 6.12.050(D)(2) shall be: FLORU = 200 gallons per day pd BODRU = 200 milligrams per liter m /I TSSRU = 215 m /I A = 0.69 B = 0.14 C = 0.17 Page 4 of 5 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 120 of 217 Page 12 of 38 SCHEDULE OF CAPACITY FEES, RATES AND CHARGES — CONTINUED Non-Residential Capacity Fee Installment Payment Program Interest Rate — The annual interest rate for calculation of payments under this program shall be the rate as established in the Schedule of Environmental and Development- Related Fees and Charges pursuant to the Provisions of Chapter 6.30 of the District Code. Number of Payments — Up to fifteen equal annual payments (one per fiscal year), at the option of the applicant. The first annual payment shall be due at the time the permit is issued with each of the remaining payments charged on the annual property tax bill. Capacity Use Charge Program For existing Capacity Use Charge Agreements only: Capacity Use Charge Rates Use Code User Group Annual ($/Hundred Cubic Feet) RS Restaurants (dine-in) $6.93 RT Restaurants (paper service / no dishwashers) $6.93 The annual payment for each agreement signed prior to March 19, 2021 will be reviewed. If the annual payment would be higher under the Non-Residential Capacity Fee Installment Payment Program, the difference will be waived for the customer. If the annual payment would be lower under the new program, the lower payment will be charged for that year. Page 5 of 5 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 121 of 217 Page 13 of 38 ATTACHMENT 1 C CENTRAL CONTRA COSTA SANITARY DISTRICT Report Regarding the Capacity Fee Update April 8, 2021 INTRODUCTION The Central Contra Costa Sanitary District (Central San) charges a Capacity Fee when properties are first connected to the public sewer or when an increase, expansion, or change of use on a non-residential parcel which creates an added burden on the wastewater collection and treatment system. Each year this fee is updated based on changes to the value of Central San's assets and the number of Central San's customers. This memo summarizes the basis for the Capacity Fee and describes the calculation used for the fee update. BACKGROUND The total value of Central San's existing assets (approximately $1.9 billion) is much greater than the value of future facilities expansion needed to accommodate future customers. While Central San's FY 2020-21 Budget lists nearly $900 million in capital projects over the next 10 years, most of these projects are driven by renovation, regulatory compliance, replacement or upgrading of facilities to maintain capacity for both current and prospective customers. Central San believes that its 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 consultants 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 in order to avoid double recovery of asset values. • The use of different service zones for gravity and pumped zones is appropriate. April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 122 of 217 Page 14 of 38 Capacity Fee Update Report Page 2 April 8, 2021 CALCULATION APPROACH The Capacity Fee is adjusted each year to reflect annual 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: Rather than attempting to determine actual market value, 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 property purchase and held at interest to the present. • 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. The depreciation schedule assumes no salvage value remaining at the end of the asset's useful life. 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 Balance: Prior fiscal year ending balance for the Sewer Construction Fund, less the principal value of Central San's outstanding debt, is used. The inclusion of the Running Expense and Self Insurance Funds was reviewed by staff and District Counsel who determined that it was no longer appropriate to include those two items in the fee calculation. Contributed assets are generally not included in the calculation in order to avoid double recovery of costs, as described in WEF's 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 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 123 of 217 Page 15 of 38 Capacity Fee Update Report Page 3 April 8, 2021 RECOMMENDED CAPACITY FEE Staff recommends that the Board adopt Capacity Fees for Fiscal Year (FY) 2020-21 by applying the valuation approach and facilities life cycles described above, resulting in updated fees as follows: Fee Category Current Proposed % Change Gravity Service $6,803 per RUE $7,351 per RUE 8.1% Pumping Service $8,388 per RUE $9,042 per RUE 7.8% The recommended fee calculation approach is a rational, practical, equitable and defensible method to determine the financial burden of new connections. A breakdown of the proposed Capacity Fees by asset category is presented in Table 1. Table 2 shows a comparison of the proposed Capacity Fees to those fees charged by neighboring agencies. The useful service life assumptions for each asset category are included in Table 3. April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 124 of 217 ATTACHMENT 1 D CENTRAL CONTRA COSTA SANITARY DISTRICT Report Regarding Capacity Fee Update Table 1-Capacity Fees Calculation-FY 2021-22 (Buy-in to all assets. Values through 06/30/2020) Value per FY 2020- Asset Category Asset Value' RUE 21 Value Change Change (S/RUE) per RUE ($) (%) Land $54,553,373 $316 $313 $3 1.0% Facilities Treatment Plant/Outfall (45% @ 100 yrs+20% @ 75 yrs+35% @ 30 yrs) $412,196,648 $2,388 $2,188 $200 9.1% Recycled Water Facilities(75% @ 50 yrs+25% @ 30 yrs) $24,832,529 $144 $120 $24 20.0% Collection System Trunks and Interceptors(30% @ 150 yrs+70% @ 100 yrs) $349,238,795 $2,023 $1,959 $64 3.3% Contributed Mains(100% @ 75 yrs) $658,442,000 not included District Renovated Mains(100% @ 100 yrs) $268,006,658 $1,552 $1,429 $123 8.6% Pumping Stations(45% @ 100 yrs+20% @ 75 yrs+35% @ 30 yrs) $86,027,275 $1,691 3 $1,585 $106 6.7% General Improvements(Buildings, Equipment,etc.) $71,263,911 $413 $380 $33 8.7% (50% @ 50 yrs+35% @ 25 yrs+ 15% @ 10 yrs) Major Repairs(100% @ 10 yrs) $13,158,471 $76 $73 $3 4.1% Sewer Construction Fund Balance (net of outstanding debt) $75,731,791 $439 $341 $98 28.7% TOTAL VALUE: $2,013,451,451 Capacity Fee-Gravity Service $1,268,982,176 $7,351 $6,803 $548 8.1% Capacity Fee- Pumped Service $1,355,009,451 $9,042 4 $8,388 $654 7.8% 172,640 Total Residential Unit Equivalents(RUES) 50,864 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 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 125 of 217 Page 17 of 38 ATTACHMENT 1 E CENTRAL CONTRA COSTA SANITARY DISTRICT Report Regarding Capacity Fee Update Table 2 — Comparison of Capacity Fees AGENCY CAPACITY FEE Dublin San Ramon Services District $15,906 Mt View Sanitary District $10,011 West County Wastewater District $9,756 Proposed CCCSD Pumped Zone $9,042 Current CCCSD Pumped Zone $8,388 Proposed CCCSD Gravity Zone $7,351 Current CCCSD Gravity Zone $6,803 Concord $5,043 Antioch (Delta Diablo Sanitation District for Treatment) $5,033 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 5, 2021 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 126 of 217 Page 18 of 38 ATTACHMENT 1 F 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 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 127 of 217 Page 19 of 38 ATTACHMENT 2A 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, EFFECTIVE JULY 1 , 2021 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-related 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-related 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 Directors of the Central Contra Costa Sanitary District 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, which exhibit 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-related service shall be as set forth in said schedule, and shall remain in effect until amended or replaced by ordinance. April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 128 of 217 Page 20 of 38 Ordinance No. Page 2 of 2 Central Contra Costa Sanitary District 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. 310 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. 310 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, 2021. PASSED AND ADOPTED by the Board of Directors of the Central Contra Costa Sanitary District on the 3rd day of June, 2021 by the following vote: AYES: Members: NOES: Members: ABSENT: Members: Tad J. Pilecki 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 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 129 of 217 ATTACkMlikif ft EXHIBIT A CENTRAL CONTRA COSTA SANITARY DISTRICT ENVIRONMENTAL AND DEVELOPMENT-RELATED FEES & CHARGES FOR FISCAL YEAR FY 2021-22 uncodified Fee Category Amount DEVELOPMENT 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) Application Fees: Basic Application (side sewer work, easement staking, permit renewal) $159 Application for new sewer service- new parcel $329 Application for new sewer service-existing parcel $239 Commercial Application (for review of plans for a change in use or expansion of a commercial facility; $397 includes up to one hour of plan review) Commercial Application- Each additional hour $171 Overflow Protection Device Installation (OPD only) no charge Side Sewer Cleanout installation (to facilitate installation of OPD only; permit not upgradable) $25 Non-Residential Capacity Fee Installment Payment Program Application Fee $514 Residential Capacity Fee Installment Program and Promissory Note Program Application Fee $514 (A-2) Mainline Extensions: Plan Review(Sewer Service): Sewer Service Review(Base fee- up to 12 hours) $4,187 Each additional hour $204 Manhole only(design & plan review) $1,347 Plan Review(Recycled Water): Recycled Water Review(Base fee- up to 8 hours) $3,119 Each additional hour $204 Recycled Water Connection only(design &plan review) $1,367 Right of Way Document Review: Appurtenant Easements(Base fee- 3 hours) $638 Subdivision Map (each) $599 Separate Instrument(Base Fee) $768 Each additional hour $213 (A-3) Private Pumping System Plan Check: Single Family Residential/ADU (Base fee-up to 2 hours) $425 Multi-Family/Commercial (outside force main)(Base fee- up to 4 hours) $971 Each additional hour $213 (A-4) Special Approvals $389 (A-5) Annexation Fee (per District Code 6.08.030): New Annexations Actual Expense Annexation Recovery Fee $666 (A-6) Reimbursement Accounts: Set-up fee $1,435 Transaction fee $199 (A-7) Special Studies: Base fee (up to 4 hours plus misc. costs) $878 Each additional hour $180 Revise :April 19, 2021 Page 1 Apri 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 130 of 217 Page 22 of 38 EXHIBIT A CENTRAL CONTRA COSTA SANITARY DISTRICT ENVIRONMENTAL AND DEVELOPMENT-RELATED FEES & CHARGES FOR FY 2021-22 uncodified Fee Category Amount DEVELOPMENT(A-8) Source Control Reviews: Source Control Business Review- base fee, includes plan review, site visit and inspection time up to $1,004 four hours Source Control Business Review-each additional hour in excess of base fee $204 Grease Variance Review(includes site visit) $433 Source Control Enforcement Review and Inspection $556 CONSTRUCTION INSPECTION Inspection of new sewer main construction and new sewer and recycled water connections and other related work on private property(includes TV inspection when appropriate). Hours of operation, including premium and holiday schedules, are available at: www.centralsan.org/pod/hours-directions (B-1) Inspections by type: Mainline base fee $962 Mainline per foot(includes in-line manholes or structures) $15.12 New Manhole or structure(e.g. recycled water meter) $1,088 Overflow Protection Device installation (OPD only) no charge Side Sewer Cleanout installation (to facilitate installation of OPD only) $50 Side Sewer Installation/Repair per 100 feet: $253 Single Inspection Charge (e.g. sewer or recycled water connection; encroachment verification; side sewer cap on property; tap and lateral (new or replacement); air test; reinspection; homeowner $253 reconstruction inspection) Manhole tap; lateral abandonment at main; pipe bursting; trash enclosure w/o trap; side sewer CIPP $506 repair; outdoor grease trap only Manhole Alteration; trash enclosure with trap; grease interceptor abandonment $759 Outside pump installation $1,012 Grease/Sand/Oil Interceptor $1,518 (B-2) Overtime inspection: First Hour(if responding from off-site) $140 Weekend/Holiday-4 hour minimum $413 Every hour thereafter $91 (B-3) Inspection of non-permitted work(+avoided charge) $1,143 Revise :April 19, 2021 Page 2 Apri 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 131 of 217 Page 23 of 38 EXHIBIT A CENTRAL CONTRA COSTA SANITARY DISTRICT ENVIRONMENTAL AND DEVELOPMENT-RELATED FEES & CHARGES FOR FY 2021-22 uncodified Fee Category Application of Fee (B-4) INSPECTION CHARGES FOR NEW CONNECTIONS (Informational Only) 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 Standard Specifications. For either scenario, connection fees will be due and payable prior to permit issuance(consistent with District Code). The changes affect Category(B)Construction Inspection as 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 fee includes: one building connection inspection and one $506 per unit 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 includes: one building connection inspection, one side sewer $1,012 per unit inspection (up to 100 feet), and two additional inspections as required per CCCSD Standard Specifications. Additional inspections and related fees may 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 has been installed. This fee includes: one building $506 per unit connection inspection and one side sewer inspection (up to 100 feet). Additional inspections and related fees may be required. 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 $1,265 per unit 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 ins ections and related fees may be re uired. Revise :April 19, 2021 Page 3 Apri 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 132 of 217 Page 24 of 38 EXHIBIT A CENTRAL CONTRA COSTA SANITARY DISTRICT ENVIRONMENTAL AND DEVELOPMENT-RELATED FEES & CHARGES FOR FY 2021-22 uncodified Fee Category Amount 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 $289 Minimum Charge (2 hour minimum) $578 Overtime- First Hour $198 Overtime- Each Additional Hour $154 Overtime-Weekend/Holiday(4 hour minimum) $660 (C-2) Dye test $328 (C-3) Collection system repair Actual Expense (C-4) Cancelled TV Inspection without prior notice $542 (C-5) Sewer locating and marking $328 • Establishing right-of-way agreements and resolving conflicts. (D-1) Process Quitclaim Deeds $1,277 Process Quitclaim Deed -plat and legal by others $814 (D-2) Process Real Property Agreement, License, or Easement: Base Fee- Up to 4 hours (minimum charge) $1,264 Each Additional Hour $174 (D-3) Right-of-way Research/Encroachment Resolution Fee Actual Expense (D-4) Right of Entry/Encroachment Permit Fee Base Fee- Up to 2 hours (minimum charge) $467 Each Additional Hour $174 MISCELLANEOUS District services provided for private sewer projects;interest rates for CCCSD programs;copying fees. (E-1) Engineering - private sewer projects Actual Expense (E-2) Soil evaluation-private sewer projects Actual Expense (E-3) Surveying Actual Expense (E-4) Annual interest rate for CADs and Septic to Sewer Financing Programs 3.22% Multiplier to be applied to Alhambra Valley Assessment District(AVAD) 2010-11 Parcel Assessment (E-5) Amount listed in Ordinance 262-Exhibit B to determine AVAD Reimbursement Fee amounts applicable 1.10531 to connections in FY 2021-22. (E-6) Multiplier to be applied to St. Mary's Road Contractual Assessment District(CAD) 2011-1 1.00633 Reimbursement Fees listed in Ordinance 279-Exhibit B. Applicable to connections in FY 2021-22. (E-7) Returned Check/Insufficient Funds Fee $40 plus bank fees Up to 10%of unpaid (E-8) Delinquent/Late Payment Fee amount due plus 1.5/o per month on unpaid balance (E-9) Document/Plan Copying Fees: 8 1/2"x 11"; 8 1/2"x 14"; 11"x 17" (per sheet) $0.20 24"x 36" Plan (per sheet) $4.00 CCCSD Standard Specifications $25.00 CCCSD Standard Specifications (Pocket Guide) $5.00 Revise :April 19, 2021 Page 4 Apri 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 133 of 217 Page 25 of 38 EXHIBIT A CENTRAL CONTRA COSTA SANITARY DISTRICT ENVIRONMENTAL AND DEVELOPMENT-RELATED FEES & CHARGES FOR FY 2021-22 uncodified Fee Category Amount (F) INDUSTRIAL PERMIT FEES Permitting and inspection of industries and other commercial dischargers to ensure availability and use of pretreatment processes. (F-1) Class I Fees (Base fee plus cost of District's lab analysis) Actual Expense (F-2) Class 11 Fees(Base fee plus cost of District's lab analysis) $3,852 (F-3) Class III Fees (Base fee plus cost of District's lab analysis) no charge (F-4) Industrial user permit application fee no charge (F-5) Special discharge permit application fee ( ): No on-site inspection, no capacity review $357 On-site inspection $898 Additional charge for capacity review(Required for discharges >50 gpm) $260 • • Sampling and disposal of septic waste and grease. (G-1) Annual permit fee $1,473 (G-2) Residential septic/toilet waste: <2,000 gallons $40 + $0.15/gal. >2,000 gallons $80 + $0.15/gal. (G-3) Restaurant grease waste: <2,000 gallons $40 +$0.03/gal. >2,000 gallons $80 +$0.03/gal. ( )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. Revise :April 19, 2021 Page 5 Apri 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 134 of 217 Page 26 of 38 ATTACHMENT 2C CENTRAL CONTRA COSTA SANITARY DISTRICT Report Regarding Environmental and Development-Related Fees and Charges Update April 19, 2021 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 and related systems; 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, administrative overhead, and other operating expenses incurred in providing the related services. Central San staff annually reviews the costs required to provide the corresponding services in order to assess whether changes to the Schedule may be appropriate. The most recent annual update to these fees was effective July 1 , 2020. California State Law generally requires that fees and charges do not exceed the "reasonable costs" incurred in providing the services for which those fees or charges are levied. For example, following the passage of Proposition 26 in November 2010, language was included in the state Constitution (Article XIII.A, Section 3) requiring that the cost for any fee or charge "is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor's burdens on, or benefits received from, the governmental activity." FEE COMPONENTS/STANDARD CALCULATION METHODOLOGY The majority of fees and charges included on the Schedule are based on salary and benefit/related overhead costs for staff time & effort. In some cases, additional costs for mileage and other service costs are also included. In a few cases, the fee or charge amount on the schedule represents costs unrelated to labor (e.g. reproduction charges). April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 135 of 217 Page 27 of 38 Report Regarding Environmental and Development-Related Fees & Charges Page 2 April 19, 2021 In all cases, fees are designed to recover the costs that Central San incurs in providing the related service during the fiscal year (FY). As a result, fees are based on averages of projected labor, overhead, mileage, and other costs that are reasonably expected to be incurred. These component costs were primarily determined based on the following methodologies: • Direct Labor: Applicable labor rates are determined using current salary rates for each employee classification (grade/step) escalated in conjunction with the terms of existing labor agreements. Where the efforts of multiple staff are required in a transaction, this process is followed for each employee grade level involved. The estimated hourly salary rates are applied to the hourly staff effort required for each transaction type in order to determine the related direct labor cost. o Current labor agreements include an allowance for annual cost of living adjustments based on Consumer Price Index (CPI)/inflation rates for the San Francisco area as determined by the U.S. Department of Labor's Bureau of Labor Statistics. Current agreements incorporate the CPI rate determined for each February. Based on publication history these rates are available in mid-March of each year. Because salary costs for a portion of FY 2021-22 are dependent on rates which will not be available until at least March of 2022, this portion of costs is estimated based on projected trends. • Benefits & Related/Overhead Costs: Employee benefit and related/overhead costs for each transaction type are calculated by applying Central San's Board-approved overhead rate to the total Direct Labor cost for that transaction as determined above. The Board-approved overhead rate for FY 2021-22 is 177%1. • Vehicle & Equipment Costs: The Internal Revenue Service (IRS) periodically issues guidance on standard mileage rates applicable to transportation or travel- related expenses. The applicable rate for calendar year 2021 is $0.56 per mile. Since vehicle depreciation costs are already captured in the overhead rate noted above, this same IRS guidance sets a "Basis Reduction Amount" to reduce this rate by $0.26 per mile in order to avoid over-recovery of these costs. Applying this reduction amount decreases the applicable mileage rate to $0.30 per mile2. o The IRS rates above are applicable to calendar year 2021. For the purpose of calculating the fees in this Schedule, Central San assumes no change for future years (dates after January 1, 2021) for which the IRS has yet to publish guidance. Based on publication history, the estimated publication date for 2022 guidance is late 2021. 1 Central San February 4, 2021 Regular Board Meeting,Agenda Item 4. z IRS Notice 2021-02, "2021 Standard Mileage Rates",available at https://www.irs.gov/pub/irs-drop/n-21-02.pdf, page 2 of 5. April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 136 of 217 Page 28 of 38 Report Regarding Environmental and Development-Related Fees & Charges Page 3 April 19, 2021 • Other Costs: o Outside Recording/Processing Fees: Certain fees (for example, quitclaim, annexation, property agreements) include a direct pass-through of any fees the District is charged in order to record various documents with related county and other outside offices and agencies. o Engineering Support: Some transactions on the Schedule require additional effort to create related entries in the District's GIS or other information systems (e.g. establishing new parcels, revising existing parcel information, etc.) Costs for Engineering Support are applied to applications or other transactions requiring this effort using the methodologies for direct labor and overhead described previously. FEES WITH ALTERNATIVE COST METHODOLOGIES The rates for some fees do not follow the calculation methodology described above. These alternative methodologies include the following: • "Actual Expense" — Some activities are so variable or unique that a standardized cost estimate cannot be reasonably determined in advance. Therefore, the fees for these activities are stated as "Actual Expense" since they are based on the actual costs incurred to complete the activity and can differ from project to project. • "No Charge" — Consistent with previous Board direction, some services are provided at no charge, including: o Application Fee for Installation of an Overflow Protection Device o Inspection of an Overflow Protection Device installation o Industrial User Permit application fee o Industrial User Permit Class III Permit Fee PROPOSED FEES AND CHARGES For FY 2021-22, staff is recommending various adjustments to the Schedule in order to account for changes in business processes and related operating costs as described above. A comparison of the current and proposed fees and charges is included as Attachment 1. The FY 2020-21 schedule includes 87 items. Administrative adjustments due to reorganization and splitting/combining of some items results in a total of 89 fees to review for the FY 2021-22 schedule. For the 89 fees reviewed, staff recommends increases to 19 items, decreases to 48, elimination of 2 fees and no change to the remaining 20. Staff is also recommending 1 additional fee. The median adjustment is -2.8%. April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 137 of 217 Page 29 of 38 Report Regarding Environmental and Development-Related Fees & Charges Page 4 April 19, 2021 Increases Staff recommends increases to 19 of the 89 schedule items. These increases range from +0.5% to +63.9%, with a median increase of +2.9%. Although several of these proposed changes are significant in percentage terms, in many cases the associated dollar amounts are minimal. For example, staff are proposing an increase to the copying fee for standard size paper from $0.15 to $0.20 per page and this $0.05 increase represents a 33.3% increase for this fee. Central San's overhead rate will be decreasing from 190% to 177% in FY 2021-22. Despite this decrease, some salary increases (in particular, those for overtime and other premium salary rates) have a greater upward effect than the decrease in overhead, resulting in an overall increase for fees that are heavily driven by premium labor costs. Additionally, some labor costs are increased when compared to the prior year because Central San employees in the related job classifications are projected to achieve a step increase during the fiscal year. Finally, as a part of the current fee review process, managers reviewed the cost elements involved in calculating these fees and determined that necessary staffing, levels of effort, or other cost factors required adjustments to more accurately recover the costs for certain fees listed on the current Schedule. Above average increases when compared to the current year fee are: • Right of Entry/Encroachment Permit Fee (D-4)(+63.9%): This increase is due to the addition of more labor time and associated overhead related to Senior Engineer (S83) effort. • Document/Plan Copying Fees (E-9)(+25.0% and +33.3%): Various fees associated with reprographics are projected to increase as follows: photocopies from $0.15 to $0.20 (standard sizes) and $3.00 to $4.00 (24" x 36") per page (+33.3%). In addition, the fee for a hard copy of Central San's Standard Specifications would increase from $20 to $25 (+25.0%). • Special Studies (A-7)(+11 .1%): This increase is due to the reassignment of a portion of this activity from an Engineering Assistant III (G69) to a Management Analyst (S72), resulting in an increase in Direct Labor and related Overhead costs. Decreases Staff recommends decreases to 48 of the 89 items on the current Schedule. These decreases range from -46.3% to -1.0%, with a median of -3.5%. The most significant of these decreases (in percentage) is the decrease in the interest rate charged for participants in Central San's financing programs. April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 138 of 217 Page 30 of 38 Report Regarding Environmental and Development-Related Fees & Charges Page 5 April 19, 2021 The primary factor related to these decreases is the previously referenced decrease in Central San's overhead rate, which was sufficient in many cases to more than offset any salary increases due to step and cost of living adjustments. Additionally, some labor costs are decreased when positions are vacated and refilled at lower, new hire salary levels. Finally, as a part of the current fee review process, managers reviewed the cost elements involved in calculating these fees and determined that required staffing, levels of effort, or other cost factors required adjustments, resulting in decreases for some items. These adjustments resulted in the following above average decreases: • Basic Application, Application for New Sewer Service (A-1) (-15.0%, -7.3%, -9.8%) • Right of Way Document Review, Subdivision Map (A-2) (-28.3%) • Various Right-of-Way fees (D-1 through D-4) (-7.0% to -20.1%) • Interest Rate for CADs and additional Financing Programs (E-4) (46.3%) Additions Staff recommends the addition of one fee to the Schedule: • CCCSD Standard Specifications (Pocket Guide) (E-9): This guide was developed following the recent updates to the Standard Specifications and is being offered for purchase in addition to the traditional Standard Specifications reference guide which also remains available. Eliminations Staff recommends eliminating 2 fees from the Schedule because they are more appropriately incorporated into other fees already listed on the Schedule. These items are: Mainline Inspection per foot charge in undeveloped land (proposed combination with inspections in developed areas) and Inspection of New Manhole or Rodding Inlet (proposed combination with "New Manhole or Structure"). Unchanged Staff also recommends leaving 20 of the 89 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) or are nominal amounts normally associated with other billed activities (e.g. $25/$50 for side sewer cleanout). April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 139 of 217 Page 31 of 38 Report Regarding Environmental and Development-Related Fees & Charges Page 6 April 19, 2021 FINANCIAL IMPACT The fees and charges on this schedule are intended to recover Central San's labor costs, administrative overhead, and other operating expenses incurred in providing the related services. The FY 2021-22 District budget projects approximately $1.9 million in Permit & Inspection Fee revenues, representing a $70,000 (3.6%) decrease compared to the FY 2020-21 budget. This decrease is the result of a combination of individual fee reductions and some anticipated development increases due to improving economic conditions. SUMMARY If the proposed revisions to the Schedule are adopted, 20 items will remain unchanged, 19 will increase, and 48 will decrease. Additionally, 2 items will be eliminated/combined with others and 1 new item will be added to allow for more appropriate fee assessment and cost recovery. Attached Supportinq Document: 1. Comparison of Current&Proposed Fees and Charges for FY 2021-22 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 140 of 217 ATTAC H MMY J68 ATTACHMENT 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMPARISON OF CURRENT & PROPOSED FEES & CHARGES FOR FY 2021-22 DRAFT Fee Category Current Fee Proposed Fee % Change DEVELOPMENT 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) Application Fees: Basic Application (side sewer work, easement staking, permit renewal) $187 $159 -15.0% Application for new sewer service- new parcel $355 $329 -7.3% Application for new sewer service-existing parcel $265 $239 -9.8% Commercial Application (for review of plans for a change in use or expansion of a commercial facility; $370 $397 7.3% includes up to one hour of plan review) Commercial Application - Each additional hour $177 $171 -3.4% Overflow Protection Device Installation (OPD only) no charge no charge no change Side Sewer Cleanout installation (to facilitate installation of OPD only; permit not upgradable) $25 $25 no change Non-Residential Capacity Use Charge Capacity ° Fee Installment Payment Program Application Fee $534 $514 -3.7/o Residential Capacity Fee Installment Program and $534 $514 -3.7% Promissory Note Program Application Fee (A-2) Mainline Extensions: Plan Review (Sewer Service): Sewer Service Review (Base fee - up to 12 hours) $4,341 $4,187 -3.5% Each additional hour $211 $204 -3.3% Manhole only (design & plan review) $1,382 $1,347 -2.5% Plan Review (Recycled Water): Recycled Water Review(Base fee- up to 8 hours) $3,231 $3,119 -3.5% Each additional hour $211 $204 -3.3% Recycled Water Connection only (design & plan ° review) $1,382 $1,367 -1.1 /° Right of Way Document Review: Appurtenant Easements (Base fee - 3 hours) $666 $638 -4.2% Subdivision Map (each) $835 $599 -28.3% Separate Instrument (Base Fee) $817 $768 -6.0% Each additional hour $222 $213 -4.1% Revised:April 19, 2021 Page 1 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 141 of 217 Page 33 of 38 ATTACHMENT 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMPARISON OF CURRENT & PROPOSED FEES & CHARGES FOR FY 2021-22 DRAFT Fee Category Current Fee Proposed Fee IF% Change (A-3) Private Pumping System Plan Check: Single Family Residential/ADU (Base fee - up to 2 $444 $425 -4.3% hours Multi-Family/Commercial (outside force main) $1,011 $971 -4.0% Base fee- up to 4 hours Each additional hour $222 $213 -4.1% (A-4) Special Approvals $400 $389 -2.8% (A-5) Annexation Fee (per District Code 6.08.030): New Annexations Actual Expense Actual Expense no change Annexation Recovery Fee $676 $666 -1.5% (A-6) Reimbursement Accounts: Set-up fee $1,472 $1,435 -2.5% Transaction fee $204 $199 -2.5% (A-7) Special Studies: Base fee (up to 4 hours plus misc. costs) $790 $878 11.1% Each additional hour $172 $180 4.7% (A-8) Source Control Reviews: Source Control Business Review- base fee, includes plan review, site visit and inspection time $1,036 $1,004 -3.1% up to four hours Source Control Business Review- each additional $211 $204 -3.3% hour in excess of base fee Grease Variance Review(includes site visit) $420 $433 3.1% Source Control Enforcement Review and $575 $556 -3.3% Inspection Revised:April 19, 2021 Page 2 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 142 of 217 Page 34 of 38 ATTACHMENT 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMPARISON OF CURRENT & PROPOSED FEES & CHARGES FOR FY 2021-22 DRAFT Fee Category Current Fee Proposed Fee % Change CONSTRUCTION INSPECTION Inspection of new sewer main construction and new sewer and recycled water connections and other related work on private property(includes TV inspection when appropriate). Hours of operation, including premium and holiday schedules, are available at. www.centralsan.orp/pod/hours-directions (B-1) Inspections by type: Mainline base fee $943 $962 2.0% Mainline per foot (includes in-line manholes or $14.82 $15.12 2.0% structures) undeveloped Per Font Charge (on land) $40-.G7 #N/A #N/A New Manhole or structure (e.g. recycled water ° meter) $1,148 $1,088 -5.2/°Overflow Protection Device installation (OPD only) no charge no charge no change Side Sewer Cleanout installation (to facilitate installation of OPD only) $50 $50 no change Side Sewer Installation / Repair per 100 feet: $260 $253 -2.7% Single Inspection Charge (e.g. sewer or recycled water connection; encroachment verification; side sewer cap on property; tap and lateral (new or $260 $253 -2.7% replacement); air test; reinspection; homeowner preconstruction inspection) Manhole tap; lateral abandonment at main; pipe bursting; trash enclosure w/o trap; side sewer CIPP $520 $506 -2.7% repair; outdoor grease trap only Manhole Alteration; trash enclosure with trap; $780 $759 -2.7% grease interceptor abandonment Outside pump installation $1,040 $1,012 -2.7% New MaRh le r R ddiR„ info+ (private) $4-,g4g #N/A #N/A Grease/Sand /Oil Interceptor $1,560 $1,518 -2.7% (B-2) Overtime inspection: First Hour(if responding from off-site) $139 $140 0.7% Weekend/Holiday-4 hour minimum $406 $413 1.7% Every hour thereafter $84 $91 8.3% (B-3) Inspection of non-permitted work(+ avoided charge) $1,170 $1,143 -2.3% Revised:April 19, 2021 Page 3 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 143 of 217 Page 35 of 38 ATTACHMENT 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMPARISON OF CURRENT & PROPOSED FEES & CHARGES FOR FY 2021-22 DRAFT Fee Category Application of Fee (B-4) INSPECTION CHARGES FOR NEW CONNECTIONS (Informational Only) 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 Standard Specifications. For either scenario, connection fees will be due and payable prior to permit issuance(consistent with District Code). The changes affect Category (B) Construction Inspection as 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 $520 per unit $506 per unit -2.7% the rough plumbing 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. 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 includes: o one building connection inspection, one side sewer $1,040 per unit $1,012 per unit -2.7/inspection (up to 100 feet), and two additional inspections as required per CCCSD Standard Specifications. Additional inspections and related fees may 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 $520 per unit $506 per unit -2.7% 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. 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 $1,300 per unit $1,265 per unit -2.7% 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 Revised iris r�q"oand related fees may be required. Page 4 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 144 of 217 Page 36 of 38 ATTACHMENT 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMPARISON OF CURRENT & PROPOSED FEES & CHARGES FOR FY 2021-22 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 $301 $289 -4.0% Minimum Charge (2 hour minimum) $602 $578 -4.0% Overtime - First Hour $198 $198 0.0% Overtime - Each Additional Hour $153 $154 0.7% Overtime -Weekend / Holiday(4 hour minimum) $657 $660 0.5% (C-2) Dye test $340 $328 -3.5% (C-3) Collection system repair Actual Expense Actual Expense no change (C-4) Cancelled TV Inspection without prior notice $561 $542 -3.4% (C-5) Sewer locating and marking $340 $328 -3.5% • Establishing right-of-way agreements and resolving conflicts. (D-1) Process Quitclaim Deeds $1,467 $1,277 -13.0% Process Quitclaim Deed - plat and legal by others $979 $814 -16.9% (D 2) Process Real Property Agreement, License, or Easement: Base Fee- Up to 4 hours (minimum charge) $1,581 $1,264 -20.1% Each Additional Hour $187 $174 -7.0% (D-3) Right-of-way Research / Encroachment Resolution Actual Expense Actual Expense no change Fee (D-4) Right of Entry/ Encroachment Permit Fee Base Fee- Up to 2 hours (minimum charge) $285 $467 63.9% Each Additional Hour $187 $174 -7.0% Revised:April 19, 2021 Page 5 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 145 of 217 Page 37 of 38 ATTACHMENT 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMPARISON OF CURRENT & PROPOSED FEES & CHARGES FOR FY 2021-22 DRAFT Fee Category Current Fee Proposed Fee % Change 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 AA+ni m Annual interest rate for CADs and Septic to 0 0 0 (E-4) Sewer Capacity Use Program Financing Programs 6.00/0 3.22/o -46.3/o Multiplier to be applied to Alhambra Valley Assessment District(AVAD) 2010-11 Parcel (E-5) Assessment Amount listed in Ordinance 262-Exhibit 1.08434 1.10531 1.9% B to determine AVAD Reimbursement Fee amounts applicable to connections in FY 2021-22. Multiplier to be applied to St. Mary's Road (E-6) Contractual Assessment District(CAD) 2011-1 0.98724 1.00633 1.9% Reimbursement Fees listed in Ordinance 279-Exhibit B. Applicable to connections in FY 2021-22. (E-7) Returned Check/ Insufficient Funds Fee $40 plus $40 plus no change bank fees bank fees Up to 10% of Up to 10% of unpaid amount unpaid amount (E-8) Delinquent/ Late Payment Fee due plus 1.5% per due plus 1.5% per no change month on unpaid month on unpaid balance balance (E-9) Document/ Plan Copying Fees: 8 1/2"x 11"; 8 1/2"x 14"; 11"x 17" (per sheet) $0.15 $0.20 33.3% 24"x 36" Plan (per sheet) $3.00 $4.00 33.3% CCCSD Standard Specifications $20.00 $25.00 25.0% CCCSD Standard Specifications (Pocket Guide) N/A $5.00 new Revised:April 19, 2021 Page 6 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 146 of 217 Page 38 of 38 ATTACHMENT 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMPARISON OF CURRENT & PROPOSED FEES & CHARGES FOR FY 2021-22 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. (F-1) Class I Fees (Base fee plus cost of District's lab Actual Expense Actual Expense no change analysis) (F 2) Class 11 Fees (Base fee plus cost of District's lab $3,745 $3,852 2.9% analysis) (F-3) Class III Fees (Base fee plus cost of District's lab no charge no charge no change analysis) --jr (F-4) Industrial user permit application fee no charge no charge no change (F-5) Special discharge permit application fee (*): No on-site inspection, no capacity review $361 $357 -1.1% On-site inspection $888 $898 1.1% LAdditional charge for capacity review (Required ° for dischar es >50 m $269 $260 -3.3/o DISPOSAL(") Sampling and disposal of septic waste and grease. (G-1) Annual permit fee $1,488 $1,473 II -1.0% (G-2) Residential septic/toilet waste: < 2,000 gallons $40 + $0.15/gal $40 + $0.15/ga1. no change > 2,000 gallons $80 + $0.15/gal $80 + $0.15/ga1. no change (G-3) Restaurant grease waste: < 2,000 gallons $40 + $0.03/gal $40 + $0.03/gal. no change > 2,000 gallons $80 + $0.03/gal $80 + $0.03/gal. no change (*)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: April 19, 2021 Page 7 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 147 of 217