HomeMy WebLinkAbout19. Review a draft Proposition 218 notice for SSC rates; authorizemailing of notices for proposed SSC and REW charge ratesItem 19.
BOARD OF DI RECTORS
POSIT ION PA PER
M E E T ING D AT E :J A NUA RY 19, 2023
S UB J E C T: R E V I E W D R A F T P R O P O S I T I O N 218 NOT I C E A ND A UT HO R I Z E MA I L I NG O F P UB L I C
NOT I C E S OF P RO P OS E D S E W E R S E RV I C E C HA R G E (S S C) A ND R E C YC L E D W AT E R
(R E W ) C HA R G E R AT E I NC R E A S E S F OR F I S C A L YE A R S 2023-24 A ND 2024-25
S UB M IT T E D B Y:
D A NE A G E MME L L, P L A NNI NG A ND D E V E L O P ME NT
S E RV I C E S D I V I S I O N MA NA GE R
INIT IAT ING D E PART M E NT:
E NG-P DS -D I V I S I O N MA NA G E R
RE V IE WE D B Y:E MI LY B A RNE T T, C O MMUNI CAT I O NS A ND GOV E R NME NT R E L AT I O NS MA NA G E R
P HI L I P L E I B E R, D I R E C TOR O F F I NA NC E A ND A D MI NI S T R AT I O N
R oger S. Bailey
General Manager
K enton L . Alm
District Counsel
IS S UE
To comply with Proposition 218 public notice requirements, Central S an must provide a 45-day written notice to property
owners prior to considering proposed S S C and R E W Charge rate increases at a public hearing.
B AC K G RO UND
The Board of Directors (Board) held a F inancial P lanning Workshop on J anuary 12, 2023 to address Central San's long-term
financial plan for S S C and R E W rate issues and the future outlook needs f or infrastructure. I n preparation for the workshop,
the Board also held a discussion with staff regarding residential S S C rates for Accessory Dwelling Units (A D U) at its
December 15, 2022 regular B oard meeting.
Sewer S ervice C harge:
Central S an perf ormed a Cost of Service update, which addresses the overall revenue requirement, how those costs are
allocated between customer classes, and how those costs are recovered from each class. A t the most recent workshop,
staff overviewed the long-term financial plan and rate scenarios. K ey takeaways included:
1. The cost of service analysis justifies the addition of an A D U residential S S C customer class.
2. D ue to changes in usage patterns, there is a shift of costs f rom residential to non-residential customers. P roposed
changes to the customer classes are designed to be revenue neutral to C entral San overall, but S S C rates can increase
or decrease between -5 percent to +6 percent for individual customer classes f or the first year.
3. The second year would include a four percent increase across all customer classes.January 19, 2023 Regular Board Meeting Agenda Packet - Page 265 of 319
Page 1 of 7
3. The second year would include a four percent increase across all customer classes.
4. Proposed capital spending has been reduced in the next couple of years, shifting spending further out in the Ten-Year
C apital I mprovement Plan, helping reduce near-term rate pressure.
5. A combination of revenue bond and cash financing for large (less f requent and non-recurring) infrastructure projects.
W hile S tate Revolving F und loans have f avorable terms, funds are scarce and there is intense competition for them.
R evenue bonds are the basis f or future debt needs.
6. Pay-as-you-go funding for pipeline replacement projects.
I n addition to the workshop discussions, other planning documents have outlined the goals, objectives, metrics, and overall
services provided by Central San, as well as the level of resources needed to provide such services. T hese documents
include the current staffing plan, an updated cost of service study, and F Y 2022-24 S trategic Plan. The F Y 2023-24 budget
process, commencing now, will also specify in detail the resources needed for the upcoming fiscal year, and demonstrate the
need for rate adjustments specified in the P roposition 218 notices.
Re cycle d Wate r:
At the J anuary 12, 2023 Financial Planning Workshop, the Board reviewed the financial and rate projections for recycled water
and directed staff to proceed with preparing the R E W Proposition 218 notice based on a three percent annual increase in the
first fiscal year and a four percent increase in F Y 2024-25. T he R E W Proposition 218 notice will be sent to all property owners
within 1,000 feet of the recycled water pipeline within Z one 1 and will provide important details about the proposed two-year
rate increases.
S C HE D UL E
I n order to meet the 45-day notice requirements of P roposition 218 and hold the public hearing on April 20, 2023, the notice
must be mailed to property owners no later than March 4. The S S C P roposition 218 notice requires time f or of fsite
printing/production, address labeling, postage requirements and delivery to the Post Office with adequate time to sort and
deliver. T he S S C Proposition 218 notice for industrial customers, schools, and the R E W P roposition 218 notice will be
processed in-house due to the small number of notices.
ALT E RNAT IV E S /C O NS I D E RAT IO NS
The Board could direct staf f to make minor revisions to the S S C P roposition 218 notice prior to submitting for printing.
The Board could also direct staff to make signif icant revisions to either Proposition 218 notice or to bring a revised notice back
to the Board at a future meeting. Note that this would require rescheduling the public hearing to a later date, and this action is
not recommended.
F I NANC IAL I M PACT S
The total cost for the P roposition 218 notices to customers will be approximately $85,000 to print, address, and send by F irst-
Class mail (legally required).
Central S an’s annual S ewer Service Charge f unds operations, maintenance, and the capital projects program. Staff has made
assumptions for both programs in developing the rate model. Over the last eight years, the operating budget has been kept
essentially flat and this year it will address higher costs that may increase it by $6 million; from $85.0 million this year up to
$90.9 million next year. T he capital budget has significantly increased over the last three years. Therefore, this next year will
see a decrease from $90.7 million in the current year to $78.5 million next year to fund critical inf rastructure as outlined in the
S S C Proposition 218 notice.
The economic uncertainty and timing of a few major f uture projects can impact Central San's rates and debt issuances.
Additionally, staff is evaluating how to optimize capital project priorities. W ith these uncertainties, staf f is recommending a two-
year S S C rate schedule.
Central S an proposes sewer service rate increases f or the next two years as shown in the table below:
January 19, 2023 Regular Board Meeting Agenda Packet - Page 266 of 319
Page 2 of 7
US E R GROUP
P RO P O S E D
RAT E
E F F E C T IV E
J ULY 1, 2023
P RO P O S E D
RAT E
E F F E C T IV E
J ULY 1, 2024
Residential
Single F amily I ncrease 1%4.0%
Annual S S C $697 $725
Accessory Dwelling Units I ncrease (48.2%)4.1%
Annual S S C $339 $353
Multi-F amily Residences I ncrease (4.9%)4.0%
Annual S S C $622 $647
Non-Residential
L ow I ncrease 6%4.1%
Annual S S C $7.63 $7.94
Medium-L ow I ncrease 5.5%4.0%
Annual S S C $9.32 $9.69
Medium I ncrease (0.7%)4.0%
Annual S S C $10.99 $11.43
Medium-High I ncrease (2.5%)4.0%
Annual S S C $12.04 $12.52
High I ncrease (11.5%)4.0%
Annual S S C $14.48 $15.06
Minimum Charge I ncrease (4.9%)4.0%
Annual S S C $622 $647
Residential rates shown in dollars per residential unit.
Non-R esidential rates shown in dollars per hundred cubic f eet.
Central San proposes a three-percent recycled water rate increase each year for the next two years as shown in the table below:
US E R GROUP
C URRE NT RAT E
(per thousand gallons)
P ROP OS E D
RAT E
E F F E C T IV E
J ULY 1,
2023
(per thousand
gallons)
P RO P O S E D
RAT E
E F F E C T I V E
J ULY 1,
2024
(per thousand
gallons)
Class I (former potable users) 3%4%
$4.15 $4.27 $4.44
Class I I (f ormer canal/well users) 3%4%
$1.98 $2.04 $2.12
C O M M UNIT Y O UT RE AC H
Central S an takes its responsibility to provide customers with clear and detailed information on proposed rate changes very
seriously. These outreach eff orts significantly exceed the requirements of P roposition 218, including:
Providing an expanded S S C Proposition 218 notice that is more readable, engaging, and accessible to customers by
including graphics, locations of projects, and summarizing information.
January 19, 2023 Regular Board Meeting Agenda Packet - Page 267 of 319
Page 3 of 7
I ncorporating the notice of the proposed rate increases and public hearing in the Pipeline newsletter in an ef fort to reach
additional customers, including both property owners and tenants.
R eceiving protests and customer rate inquiries through traditional mail, email, f ax, and hosting a C ommunity I nformation
Line.
Publishing a calendar of rate-related events, holding public workshops, distributing Proposition 218 notices that
comprehensively describe the proposed rate changes, and holding a public hearing regarding the changes as required
by P roposition 218.
C O M M I T T E E RE C OM M E ND AT IO N
This matter was not reviewed by a Board Committee.
RE C O M M E ND E D B O ARD AC T ION
Review draf t S S C Proposition 218 notice, and authorize mailing of the public notices of proposed S S C and R E W rate
increases f or Fiscal Years 2023-24 and 2024-25.
Strategic Plan Tie-I n
G O AL F O UR: G overnance and Fiscal Responsibility
Strategy 1 - Promote and uphold ethical behavior, openness, and accessibility, Strategy 2 - Encourage and facilitate public
participation, Strategy 3 - Maintain financial stability and sustainability
AT TAC HM E NT S:
D escription
1. Draft Proposition 218 Notice - Sewer Service Charge
January 19, 2023 Regular Board Meeting Agenda Packet - Page 268 of 319
Page 4 of 7
N6.i y
Item 19. (Hand ut)
,JINJOCENTRAL SAN ' Updated raft
PRSRT Notice
First Class
• U.S.Postage RAL SAN '
5019 IMHOFF PLACE, MARTINEZ, CA 94553 PAID
h. OPOSED
rfi
Central Contra CoINWnitary District (Central San) is your local sewer
k' service provider pfflWing public health and the environment for almost -
b _
,,,,..• 77 years.Our team b-dedicated professionals work around the clock
to collect and clean wastewater for nearly 500,000 residents and over _ 7
3,000 businesses in central Contra Costa County.Every time you wash -
your dishes or clothes,flush your toilets,or use your sinks,bathtubs,
NOTICE OF �!! !!! ! ! 1! !! i!! ! !!e ! !!!!!! ! ! f!- tail !! z
L'I'llll'1"iII11Ylt""""'1"111"'ll"""1111'IH'1'l""II and showers,Central San collects and cleans all that dirty water.It is ;
14*1*4242************5-DIGIT 9 not easy,but we take our job seriously.We maintain over 1,500 miles of
PROPOSED RATE -
Jane Doe underground pipe and 18 pump stations to transport wastewater from
INCREASESANDur customers to our regional treatment pl nt, rhere we clean about
1250 Springbrook Rd o llo tewatereveryyear. I
PUBLIC HEARING Walnut Creek CA 94597
AT 2:30 P.M. ON
APRIL 2012023
DOING MORE TO PROTECT OUR ENVIRONMENT W116111"a
1. HOUSEHOLD HAZARDOUS WASTE COLLECTION(HHW):For 25 years, Despite the challenges of the pandemic,
• . • • we have operated one of the most successful HHW facilities in the nation. over the past four years we've worked hard to
We have collected over 47 million pounds of paint,cleaners,pesticides, complete several significant infrastructure
batteries,fluorescent lamps,and much more,keeping those hazardous improvement projects.
products out of sewers,storm drains,and landfills by reusing or recycling 1. RECYCLED WATER:We completed construction
We will continue to maintain and upgrade our treatment plant, nearly 90%of what we collect. of new storage facilities that will hold 6 million
pump stations,pipelines,and other critical infrastructure 2.RECYCLED WATER:Always on the forefront of local water resiliency, gallons of recycled water ready for distribution to
essential to moving and cleaning wastewater. we've distributed more than 4.5 billion gallons of recycled water to make the most of our precious water resources.
customers,saving precious drinking water supplies. 2.PIPES AND PUMP STATIONS:We replaced over
19 miles of aging neighborhood sewer pipes
We will continue to implement an extensive neighborhood sewer 1111m
• • throughout our service area and completed major
pipe replacement program,which will maintain and improve L t renovations to three large um stations serving
2 reliable service levels in the community. We have not done this alone.You,our customers,have provided us with 9 pump 9
the funds necessary to do all this work and fulfill our mission of protecting Orinda and Moraga.
public health and our local environment.We are thankful for the trust you 3.INFLOW AND OUTFALL:We rehabilitated the
have laced in us,and we remain committed to providing you exceptional q p
We stay committed to protecting the environment and will continue to p p g Ymechanical equipment ment and concrete structures
offer and grow services such as the Household Hazardous Waste Collection 7 service at reasonable rates.At Central San,we continually strive to control where wastewater enters our treatment plant and
Facility and Residential and Commercial Recycled Water Fill Stations. . ' costs and do everything we can to keep rates low.Through proactive the cleaning process begins.We also completed
`# maintenance,we've extended the lifespan of our facilities and equipment critical inspections and improvements to our
to make every dollar work harder for our customers.When necessary,we 3.5-mile outfall pipeline,which carries cleaned water
also have continuous) invested in our pipes,pumps,and treatment plant
We will continue to prudently manage costs and maintain y p p p p p from our treatment plant to Suisun Bay to be safely
to ensure safe,efficient,and reliable service. returned to the environment.
the financial stability and sustainability of Central San. t �_
• 4.STEAM AND AERATION BLOWER SYSTEMS:We
s " completed comprehensive condition assessments
Held operation and maintenance Maintained AAA(S&P)and Aal
of our aging steam and aeration blower systems
costs flat for the past 8 years (Moody's)credit ratings to keep
We will continue to provide our customers5 „ borrowing costs low and began design and construction of critical
exce tional service at res onsible rates. Secured low-cost state financing to
p p y save$20 million in interest costs on Benchmark performance seismic and other upgrades.
large-scale projects annually to ensure efficient,
a
• Paid off pension liabilities,projected to cost-effective operations
• • information:
• . . • Printed soy-based
.. . on
recycled paper
® save nearly$15 million in interest payments
PREPARING FOR THE FUTURE
. . .
As we begin our 77th year of service to the community,our key priori-
ties include replacing aging infrastructure,meeting emerging regula-
tory requirements,preparing for the future,and ensuring environmental
stewardship and sustainability in everything we do.As parts of our system y, f ri
reach the end of their useful lives,prudent capital investments are neces- Family p at
Sin H $690.00 $697.00 $725.00 t
sary to guarantee the reliable service you have come to expect from us. g Yomes
Our long-term planning has identified many upgrade and replacement Apartments,Condominiums,Duplexes,Mobile Homes $654.00 $622.00 $647.00
projects for the collection system pipes,pump stations,and treatment _
Accessory Dwelling Units(ADUs)* $339.00 $353.00
plant to ensure they continue to function properly now and into the future. F
• • • 11101M MIR •.. �: .•t S��
The proposed rate increases will continue to provide the necessary funding . . ►
for these critical projects currently scheduled for the next two years. STRENGTH ' �� xrf t , �
CATEGORYt DESCRIPTION
1. COLLECTION SYSTEM:We will replace about 14 miles of aging neighbor- Retail,Office,Churches,Daycare,
hood sewer pipes to ensure reliable service for decades to come. LOW Preschools,Universities,Rest Homes, $7.20 $7.63 $7.94
and Automotive
2.PUMP STATIONS:We will continue phased renovations of our pump + ► �' ,tl � `-
stations,focusing on three large pump stations that are essential for contin- Delis,Ice Cream and Yogurt Shops, i'of
("
uous delivery of wastewater from the Martinez area to our treatment plant. LOW-MEDIUM Coffee Shops,Bars,and Shared meters $8.83 $9.32 $9.69with 50/or less food service
3.LARGE SEWER INSPECTIONS:We will continue inspection and condition Shared meters with 50%or more s
assessments of large sewers,called interceptors,to plan for future repairs. MEDIUM food service $11.07 $10.99 $11.43
Measuring up to 8.5 feet in diameter,these pipes convey wastewater from Hotels,Motels,Restaurants,Supermarkets, e
neighborhoods throughout our service area;nearly half are over 50 years old. MEDIUM-HIGH Shared meters with Bakeries or other $12.35 $12.04 $12.52
High Strength Food Services
4.SOLIDS HANDLING:We will launch a large-scale,multi-year
I
rehabilitation of our solids handling facilities,starting with replacing aging HIGH Bakeries,Breweries,Restaurants with $16.70 $14.48 $15.06
equipment including burners,centrifuges,pumps,and pollution control Grinders or Emulsifiers,and Mortuaries
equipment to ensure reliable ongoing processing of wastewater solids Elementary(per student) $8.58 $8.94 $9.30 ' f au
and compliance with strict air quality regulations. SCHOOLS Intermediate/High (per student) $16.95 $17.89 $18.61
5.STEAM AND AERATION BLOWER SYSTEMS:We will repair or replace
critical components of our aging steam generation equipment to address
vulnerabilities identified through our recent condition assessments. *NEW RATE CATEGORY:Central San is tSTRENGTH CATEGORY:Some types of businesses produce more
6.AERATION BASINS:We will begin the phased repair or replacement of mechanical proposing to implement a new,lower concentrated sewer waste that requires additional energy and
rate for Accessory Dwelling Units effort to treat.Central San has developed five categories-
equipment and concrete structures in our aeration basins to improve seismic reli- (ADUs),which are currently billed at low,low-medium,medium,medium-high,and high -to fairly Central San's annual Sewer Service Charge funds round-the-
ability,enhance the efficiency of our biological treatment processes,better protect the some rate as an apartment unit charge those customers for their proportionate cost of providing clock operations,maintenance,and construction of critical
the environment,and prolong the lifespan of these critical facilities. or condo.ADUs may include in-law wastewater treatment services.
units,backyard cottages,and other infrastructure.Proposition 218 requires that wastewater agen-
7.RECYCLED WATER:We will complete the first phase of renovations to our recycled smaller independent residential units A nonresidential customer's annual Sewer Service Charge is cies like Central San must base their charges on the cost of
water plant,originally constructed in the 1970s.Along with our recently completed located on the some property as a determined by multiplying the appropriate strength category rate providing those services.Central San's Board of Directors will
recycled water storage,these improvements will ensure continued reliability of our single-family home. To ensure fair times the annual wastewater discharge volume measured in HCF consider proposed rate increases for the next two years for
recycled water system and support expanded capacity for the future. rates,Central San completed a study (Hundred Cubic Feet).For example,a bakery discharging 250 HCF property owners of single family homes,multifamily dwellings,
to assess the costs of providing sewer per year would pay an annual sewer service charge at the July 1,
service to all of our customer classes, 2023 proposed rate calculated as follows: Accessory Dwelling Units (ADUs),and commercial,indus-
including ADUs. The proposed rates ($14.48 per HCF)x(250 HCF per year) =$3,620.00. trial,and institutional properties at a public hearing on APRIL
are based on this analysis. 20,2023,AT 2:30 P.M.,Central Contra Costa Sanitary District
If you have questions regarding your Sewer Service Charge,or
would like us to calculate a property-specific estimate of your Board Room,5019 IMHOFF PLACE,MARTINEZ,CA 94553.Public
Sewer Service Charge for the upcoming rate years,please send an comments and written protests will be accepted at the public
3 • , 1�
e-mail request including your name,Assessor's Parcel Number(s), hearing.Written protests may be mailed or hand-delivered
address,and phone number to rates@centralsan.org,or call to Central San prior to the public hearing to the Secretary of
'
Central Sans Community Information Line at(925)335-7702.
the District at the address listed above.Written protests must
r Additional information is available at centralsan.org/notice. include the property's address or Assessor's Parcel Number(s)
1 _ and must be signed by the property owner or tenant.Scanned
j
copies of signed protest letters may also be submitted by, P 9
\ B fax(925) 372-0192 or email to KYOUNG(R)CENTRALSAN.ORG.
�° \ " " ��. �. • , All written protests must be received prior to the close of the
public hearing.As required by law,the rate increases will not be
imposed if valid written protests are received from a majority of
- property owners.More information about filing a protest can be
tk ' found at centraIsan.org/notice or by calling (925) 335-7702.Any
Additional line suit to set aside the proposed rate increases must be filed within
�� �y �. 120 days of July 1,2023,the effective date.