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Home My WebLink About11. Conduct a public hearing to receive comment and consider adopting uncodified Ordinance No. 327DCENTRALSAN MEETING DATE: JUNE 1, 2023 BOARD OF DIRECTORS POSITION PAPER Page 1 of 5 Item 11. SUBJECT: CONDUCT PUBLIC HEARING TO RECEIVE COMMENT AND CONSIDER ADOPTING UNCODIFIED ORDINANCE NO. 327 ESTABLISHINGA "SCHEDULE OF RECYCLED WATER CHARGES" IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.38 INCREASING THE CHARGE FOR RECYCLED WATER CUSTOMERS BYTHREE PERCENT EFFECTIVE JULY 1, 2023, AND INCREASING THE CHARGE FOR RECYCLED WATER CUSTOMERS BYAN ADDITIONAL 3 PERCENT EFFECTIVE JULY 1, 2024. SUBMITTED BY: INITIATING DEPARTMENT: THOMAS BRIGHTBILL, SENIOR ENGINEER ENGINEERING AND TECHNICAL SERVICES - PDS -RATES AND FEES REVIEWED BY: DANEA GEMMELL, PLANNING & DEVELOPMENT SERVICES DIVISION MANAGER EDGAR LOPEZ, PROVISIONAL DIRECTOR OF ENGINEERING & TECHNICAL SERVICES Roger S. Bailey Kenton L. Alm General Manager District Counsel ISSUE Changes to the charges for recycled water delivered to recycled water customers are proposed. State Law and District Code require a public hearing before an ordinance changing the charges for recycled water delivered to recycled water customers be adopted. BACKGROUND Chapter 6.38 of the District Code includes provisions for the Board to adopt an uncodified schedule of rates and charges for recycled water and provides for annual increases of three percent. June 1, 2023 Regular Board Meeting Agenda Packet - Page 83 of 165 Page 2 of 5 Retail rates for recycled water were initially set lower than potable water rates to encourage use. District Code currently contains provisions for three percent annual adjustments. Historically, this adjustment has allowed Central San to pass along some of the increased cost of treating and distributing recycled water while remaining below both the potable water rate and the cost of recycled water production and distribution. Staff has reviewed the proposed three percent increases and determined that these increases result in rates that are still below Central San' s production and distribution costs. Recycled Water rates were presented and discussed at the January 12, 2023 Board Workshop and direction was given to proceed with a Proposition 218 notification for a three percent increase in retail charges for recycled water for each of the next two fiscal years. Notices of the public hearing were mailed to property owners whose parcels are either currently served or could reasonably be served by Central San's recycled water pipelines. Legal notices were published on May 18 and 25, 2023, in the Contra Costa Times and the San Ramon Valley Times for this public hearing. Only customers who currently receive recycled water from Central San's recycled water distribution system are required to pay recycled water charges. ALTERNATIVES/CONSIDERATIONS The Board could consider keeping the retail charges for recycled water at the current rates, or it could choose to increase the rates by some other amount lower than the three percent annual increases listed in notices mailed to property owners. FINANCIAL IMPACTS The proposed charges are designed to recover Central San's costs incurred for treating and distributing recycled water. Central San proposes a three -percent recycled water rate increase each year for the next two years as shown in the table below: COMMITTEE RECOMMENDATION This matter was not reviewed by a Board Committee. (The matter was discussed at the January Board of Directors Financial Workshop.) RECOMMENDED BOARD ACTION Conduct a public hearing; and adopt uncodified Ordinance No. 327 establishing a "Schedule of Recycled Water Charges" in accordance with District Code Chapter 6.38 increasing the Recycled Water charge for Recycled Water Customers by 3 percent per effective July 1, 2023 and increasing the Recycled Water charge for Recycled Water Customers by an additional three percent effective July 1, 2024. Strategic Plan Tie -In GOAL ONE: Customer and Community Strategy 2 - Promote initiatives to advance affordable and equitable access to services ATTACHMENTS: 1. Draft Ordinance June 1, 2023 Regular Board Meeting Agenda Packet - Page 84 of 165 Page 3 of 5 Attachment 1 ORDINANCE NO. 327 AN UNCODIFIED ORDINANCE OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT ADOPTING A SCHEDULE OF RECYCLED WATER CHARGES IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.38 WHEREAS, the Central Contra Costa Sanitary District (Central San) has previously developed and instituted Recycled Water Charges to finance the recycled water furnished by Central San, and WHEREAS, it is reasonable and necessary that all users of Central San's recycled water contribute their appropriate portion of the funding for the production of recycled water and the operation, maintenance, and periodic replacement of Central San's recycled water facilities; and WHEREAS, the Board of Directors has reviewed the current Schedule of Recycled Water Charges and has determined that the annual recycled water charges should be increased by: 3% for fiscal year (FY) 2023-24 and 3% for FY 2024-25; and WHEREAS, Chapter 6.38 of District Code provides the enabling authority for Central San to implement the proposed uncodified Schedule of Recycled Water Charges; and WHEREAS, a properly noticed public hearing to receive comments and protests and to consider the proposed uncodified Schedule of Recycled Water Charges was held on April 18, 2019 as set forth in the Schedule of Recycled Water Charges below; and WHEREAS, in adopting this ordinance, the Board of Directors finds that: a. Written notices of the proposed increase in recycled water charges were sent by first class U.S. mail to every owner of property that is connected or could reasonably be connected to the recycled water distribution system at least 45 days prior to the public hearing on the proposed increase conducted on June 1, 2023. b. All written protests against the proposed increase in the recycled water charges, including those provided in person, by facsimile, email and U.S. mail, were considered and tallied at the public hearing conducted on June 1, 2023, and Central San was not presented with protests by a majority of the owners of the identified parcels affected by this change. c. The amount of the charge imposed does not exceed the proportional cost of the service attributable to the properties receiving recycled water and the charge is only imposed on those properties or users actually receiving recycled water. June 1, 2023 Regular Board Meeting Agenda Packet - Page 85 of 165 Page 4 of 5 Central Contra Costa Sanitary District Ordinance No. 327 Page 2of3 d. This action is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15273 (a) (1-4) of District CEQA Guidelines. NOW, THEREFORE, the Board of Directors of Central San does ordain as follows: Section 1 (To be Uncodified The "Schedule of Recycled Water Charges" as set forth in this ordinance is hereby adopted in uncodified form pursuant to the provisions of District Code Section 6.38. Schedule of Recycled Water Charges As of the effective date of this ordinance, recycled water charges shall be charged at such rates and for such categories of users as set forth in said Schedule of Recycled Water Charges and shall remain in effect until amended or replaced by ordinance. Section 2 All ordinances, parts of ordinances and any provision of Ordinance No. 305 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 the recycled water charge rates or any portion thereof is determined invalid or unconstitutional, or during any period where the new rates are stayed due to a legal challenge, such portions of Ordinance No. 305 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. 305 had not been repealed. June 1, 2023 Regular Board Meeting Agenda Packet - Page 86 of 165 CURRENT PROPOSED PROPOSED RATE RATE RATE USER GROUP (per EFFECTIVE EFFECTIVE thousand JULY 1, 2023 JULY 1, 2024 gallons) (Per thousand (per thousand gallons) gallons) Class I (former potable users) $4.15 $4.27 $4.40 Class 11 (former canal/well users) $1.98 $2.04 $2.10 As of the effective date of this ordinance, recycled water charges shall be charged at such rates and for such categories of users as set forth in said Schedule of Recycled Water Charges and shall remain in effect until amended or replaced by ordinance. Section 2 All ordinances, parts of ordinances and any provision of Ordinance No. 305 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 the recycled water charge rates or any portion thereof is determined invalid or unconstitutional, or during any period where the new rates are stayed due to a legal challenge, such portions of Ordinance No. 305 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. 305 had not been repealed. June 1, 2023 Regular Board Meeting Agenda Packet - Page 86 of 165 Page 5 of 5 Central Contra Costa Sanitary District Ordinance No. 327 Page 3of3 With respect, however, to violations, rights accrued, liabilities accrued, or appeals taken, prior to the effective date of this ordinance, under any ordinance, or part of an ordinance, such 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 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, 2023. This ordinance shall be kept on file with the Secretary of the District. PASSED AND ADOPTED by the Board of Directors of Central San on the 1St day of June, 2023, by the following vote: AYES: Members: NOES: Members: ABSTAIN: Members: COUNTERSIGNED: Katie Young Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Approved as to form: Barbara D. Hockett President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California Kenton L. Alm, Esq. Counsel for the District June 1, 2023 Regular Board Meeting Agenda Packet - Page 87 of 165