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HomeMy WebLinkAbout04.b. Review draft to conduct a public hearing to consider amending District Code Sec. 6.12.030 and Exhibit A to Ord. 324 related to unpermitted ADUs Page 1 of 10 Item 4.b. All" BOARD OF DIRECTORS ' POSITION PAPER MEETING DATE: FEBRUARY21, 2023 SUBJECT: REVIEW DRAFT POSITION PAPER TO CONDUCTA PUBLIC HEARING TO RECEIVE PUBLIC COMMENTAND CONSIDER 1)ADOPTING ORDINANCE NO. AMENDING DISTRICT CODE SECTION 6.12.030, AND 2) AMENDING EXHIBITATO ORDINANCE NO. 324, AN UNCODIFIED ORDINANCE, FOR THE SCHEDULE OF CAPACITY FEES, RATES, AND CHARGES SUBMITTED BY: INITIATING DEPARTMENT: THOMAS BRIGHTBILL, SENIOR ENGINEER, ENGINEERING AND TECHNICAL SERVICES- FINANCIAL PLANNING PDS-RATES AND FEES REVIEWED BY: DANEA GEMMELL, PROVISIONAL DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES KENTON L. ALM, DISTRICT COUNSEL ISSUE Changes to District Code and the Capacity Fee schedule relating to unpermitted Accessory Dwelling Units (ADUs) are proposed. State Law and District Code require that a public hearing be held to receive public comment on ordinances which revise District Code and the Capacity Fee schedule. BACKGROUND On November 3, 2022, the Board of Directors (Board) heard the first of three appeals from property owners appealing staff decisions that Capacity Fees were owed for ADUs, which were constructed or converted by prior property owners without permits from Central San and without payment of Capacity Fees to Central San. Under the current District Code, such projects are charged and must pay the full Capacity Fee for one multi-family residential unit and are not eligible for the reduced Capacity Fees that properly permitted ADU projects are charged. Central San Capacity Fees for ADUs On October 8, 2017, Senate Bill 229 (SB 229)was signed into law. SB 229 extended certain reductions in Capacity Fees for ADUs to special districts such as Central San. In response to SB 229, Central San held a public hearing on November 16, 2017, to amend the District Code and revise the Capacity Fee February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 19 of 198 Page 2 of 10 schedule effective January 1, 2018. The revised District Code included section 6.12.030 (E), Capacity Fees for Unpermitted Work, which states: 1. Capacity Fees for all other uses for which the District did not receive a request for a connection permit or building plans for review shall be charged at the rate that is current at the time of discovery. 2. Capacity Fees for an Accessory Dwelling Unit constructed prior to January 1, 2018 for which the District did not issue a permit shall be charged as a multi-family residential unit. Several factors resulted in the specific language used in section 6.12.030 (E)(2), including: • the new State Law did not address work done prior to the effective date; • the new State Law included provisions that • projects which involved the conversion of an existing space into an ADU were generally exemptfrom paying sewer Capacity Fees, and • projects for new construction of an ADU would be subject to payment of a significantly reduced sewer Capacity Fee; and • Central San staff believed that property owners who failed to obtain permits for their projects should not benefit from new fee reductions when other property owners who obtained permits for projects prior to the ADU legislation paid sewer Capacity Fees without any discounts. Proposed Changes to Capacity Fees for Unpermitted ADUs In recent years, staff has seen a marked increase in the number of projects with ADUs constructed or converted by a previous property owner for which no permit was issued by Central San. Most of these current property owners were not aware that the unit was unpermitted and the proper fees had not been paid to Central San at the time they purchased the parcel. Most of the property owners are willing to pay some fees to rectify the situation but several of them have expressed concerns that they are in effect paying a penalty based on what a prior property owner did. Property owners of three parcels with unpermitted ADUs, constructed or converted by prior property owners, appealed to the Board requesting that they be allowed to pay the reduced Capacity Fees under the current fee schedule for properly permitted new-construction projects. All three appeals were granted by the Board. Concurrent with the appeals, staff began reviewing how unpermitted ADUs are handled under the current District Code and the current Capacity Fee schedule. Staff discussed several topics including how Capacity Fees should be charged with different types of unpermitted ADU projects, how fair and equitable the proposed changes would be in different scenarios, and what level of administrative effort would be required for the various scenarios. When reviewing unpermitted ADU projects, staff typically reviews information from a variety of sources to confirm that the appropriate fees were not paid to Central San and to determine when a project may have been constructed or converted. These sources of information include Central San's permits and permit files, building permits from the appropriate local building department, aerial photos (current and historic), Google Street View photos (current and historic), and real estate listings on the World Wide Web. Staff believes that the fairest and most straightforward method is to charge all unpermitted ADU projects the same Capacity Fee, regardless of which property owner did the work. The Capacity Fees for unpermitted Additional Residential Units or ADUs would be charged the same rate as for the construction February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 20 of 198 Page 3 of 10 of a new permitted AD U. ALTERNATIVES/CONSIDERATIONS The Board could chose to not take action at this time regarding Capacity Fees charged for unpermitted ADU projects. This is not recommended as special consideration has already been granted to owners of three parcels and staff continues to receive additional applications from property owners with unpermitted ADUs who are asking for consideration. The Board could chose to give staff different direction on Capacity Fees for unpermitted ADUs. FINANCIAL IMPACTS If the proposed changes to District Code and the Capacity Fee schedule are approved, the revised fees will be based on square footage and will vary from project to project. Capacity Fees for the three appeals were reduced by an average of$5,100. If this average reduction were applied to three projects per month, the resulting decrease in Capacity Fee revenue would be $183,600 per year. COMMITTEE RECOMMENDATION The Finance Committee reviewed this matter at its meeting on February 21, 2023 and recommended RECOMMENDED BOARD ACTION Conduct the public hearing to receive input on the proposed changes to District Code Section 6.12.030 and amendments to Exhibit A of the Capacity Fee schedule. Approve the proposed revisions to District Code and the Capacity Fee schedule. Strategic Plan Tie-In GOAL ONE: Customer and Community Strategy 1 - Deliver high-quality customer service GOAL FOUR: Governance and Fiscal Responsibility Strategy 1 - Promote and uphold ethical behavior, openness, and accessibility ATTACHMENTS: 1. Proposed change to District Code section 6.12.030 2. Proposed change to Exhibit A, the Schedule of Capacity Fees, Rates and Charges February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 21 of 198 Page 4 of 10 ATTACHMENT 1 6.12 Capacity Fee Program 6.12.030-General provisions. E. Capacity Fees for Unpermitted Work. 1. Capacity Fees for an Accessory Dwelling Unit for which the District did not issue a permit for an Additional Living Unit or Accessory Dwelling Unit shall be charged as described in the Schedule of Capacity Fees, Rates and Charges. �2. Capacity Fees for all other uses for which the District did not receive a request for a connection permit or building plans for review shall be charged at the rate that is current at the time of discovery. 3. Capacity Fee-,;fer-;;n AceeSSOFY DwelliRg WRit GGRStFUeted PFiE)F W jaRUaFy 1, 2018 fAF WhiGh 6.12.040- Residential capacity fees. A. Policy. Any new residential connection shall be subject to payment of capacity fees in an amount which will fund its proportionate share of the cost of District services and needed upgrades, replacements, renovations and improvements of existing District wastewater and household hazardous waste collection,treatment, recycling, reuse and disposal facilities to maintain their capacity, and to add to and/or expand these facilities in the future when needed, all of which services and facilities will ultimately be shared by current and future users.These facility costs shall be estimated pursuant to the policies and findings set forth within this chapter. B. Basis for Capacity Fees. Capacity fees for residential units shall be set from time to time as provided in this chapter based on the District's determination of the then-current value of all District assets divided by the then-current number of residential unit equivalents receiving District wastewater utility service.The residential unit fees established pursuant to the provisions of this chapter shall be representative of both the volume of flow and strength characteristics for an average residential unit as determined by wastewater industry standards and specific studies undertaken by the District and other sewering entities. C. Capacity Fees for Accessory Dwelling Units (ADUs), as defined in Title 7 Article 2 of the California Government Code [Section 65852.2],which includes efficiency units as defined in 17958.1 of the Health and Safety Code, shall conform to the requirements therein. "Existing Space" is defined as space for which a building permit has been issued, all conditions of the building permit have been satisfied, and the building permit has been closed for at least three years. D. Other Additional Residential Units not meeting the criteria for ADUs. Each residential unit shall be subject to each of the residential unit fees for the zone within which the residential unit is located as set forth in this chapter. February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 22 of 198 Page 5 of 10 In the event a separate additional residential unit is constructed on a parcel,whether or not in compliance with applicable government regulations, additional capacity fees for that residential unit shall become due.The creation of a dwelling space that accommodates an additional separate living area within a parcel,whether or not said additional separate living area is constructed within the original building or is a detached building, shall subject the parcel to assessment of applicable additional residential unit fees. An additional separate living area shall be defined as an area designed for the purpose of separate habitation that (1)will be, or can be, physically separated by a wall or door from other residential units on the parcel, and (2) contains a full bathroom consisting of a sink, a toilet, and a shower or a tub; an additional sink located outside the bathroom area; a multipurpose or bedroom area; and an exterior entrance. The time for payment of capacity fees for the added burden arising from the construction of a separate additional residential unit shall be as set forth in Section 6.12.030(D) (Time for Payment and Penalties for Delinquent Payment). February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 23 of 198 Page 6 of 10 ATTACHMENT 2 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 16, 2022. 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, 2022 in accordance with the provisions of District Code Chapter 6.12. Gravity Capacity Fee $7,200 / RUE* Pumping Capacity Fee 1 $2,011 / 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) Factors') Number of RUE = Unit of Measure Count Multiplied by the RUE Factor Use Unit of Gravity Pumping Code User Group Measure(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(')— 1,000 square 0.425 0.425 new structure or existing units feet (sq. ft.) for which the District did not previously issue a permit for an Additional Living Unit or Accessory Dwelling Unit LC Common areas 1,000 sq. ft. 0.200 0.200 Page 1 of 5 February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 24 of 198 Page 7 of 10 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 Measure(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 BN 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 (or other food 1,000 sq. ft. 1.562 1.294 service without Type 1 hood) RN Bars 1,000 sq. ft. 1.562 1.294 RI Ice cream parlors 1,000 sq. ft. 1.562 1.294 RY Yogurt shops 1,000 sq. ft. 1.562 1.294 Page 2 of 5 February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 25 of 198 Page 8 of 10 Residential Unit Equivalence (RUE) Factors0) 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(z) RUE Factor RUE Factor RS Restaurants or other food 1,000 sq. ft. 4.010 2.738 service w/T pe 1 hood dine-in RT Restaurants or other food 1,000 sq. ft. 4.010 2.738 w/T pe 1 hood take-out 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 for detached units and no more than 50% of the square footage of the existing primary dwelling for attached units. They contain a full bath, a full or partial kitchen and meet criteria of Gov't Code Sect 65852.2. A partial kitchen, as described in Government Code 65852.2 and Health and Safety Code 17958.1 includes a sink outside the bathroom. (4) Patio seating capacity fees charged for patios at Dine-in Restaurants (RS) and Bars (RN). Page 3 of 5 February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 26 of 198 Page 9 of 10 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 (gpd) BODRU = 200 milligrams per liter (mg/1) TSSRU = 215 m /I A = 0.69 B = 0.14 C = 0.17 Page 4 of 5 February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 27 of 198 Page 10 of 10 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 ($/HCF (Hundred Cubic Feet)) RS Restaurants (dine-in) $7.34 RT Restaurants (paper service / no dishwashers) $7.34 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 February 21, 2023 Regular FINANCE Committee Meeting Agenda Packet- Page 28 of 198