HomeMy WebLinkAbout14. Conduct a public hearing to receive public comment and consider adopting uncodified Ordinance No. 329 amending Schedule of Capacity Fees, Rates and Charges, replacing Ordinance No. 324DCENTRALSAN
MEETING DATE: JUNE 1, 2023
BOARD OF DIRECTORS
POSITION PAPER
Page 1 of 24
Item 14.
SUBJECT: CONDUCT PUBLIC HEARING TO RECEIVE PUBLIC COMMENT AND
CONS IDER ADOPTING UNCODIFIED ORDINANCE NO. 329AMENDING
THE SCHEDULE OF CAPACITY FEES, RATES AND CHARGES,
REPLACING ORDINANCE NO. 324 IN ACCORDANCE WITH DISTRICT
CODE CHAPTER 6.12, TO BECOME EFFECTIVE JULY 1, 2023
SUBMITTED BY: INITIATING DEPARTMENT:
THOMAS BRIGHTBILL, SENIOR ENGINEER ENGINEERING AND TECHNICAL SERVICES -
PDS -RATES AND FEES
REVIEWED BY: DANEA GEMMELL, PLANNING AND DEVELOPMENT SERVICES DIVISION
MANAGER
EDGAR LOPEZ, PROVISIONAL DIRECTOR OF ENGINEERING &
TECHNICAL SERVICES
Roger S. Bailey Kenton L. Alm
General Manager District Counsel
ISSUE
State Law and District Code require that a public hearing be held to receive public comment on ordinances
which revise Capacity Fees.
BACKGROUND
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
June 1, 2023 Regular Board Meeting Agenda Packet - Page 114 of 165
Page 2 of 24
66013 of the California Government Code. The equity buy -in method used by Central San conforms to the
requirements contained in Section 66013.
A significant change for Fiscal Year (FY) 2023-24 is the proposed elimination of the Pumped Zone
Capacity Fee. Historically, Central San charged this fee in recognition of the value of the additional assets
within those portions of the district which use pump stations and force mains to convey wastewater to the
treatment plant. The overall purpose of the Capacity Fee 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. Increased capital spending on pump station rehabilitation projects led to a review and
discussion of the fee methodology with staff, District Legal Counsel, and Raftelis Financial Consultants. A
review of the pumped zone assets has indicated that the recent investments in those assets have generally
been paid for by all Central San customers, not just those within the pumped zones and elimination of the
Pumped Zone Capacity Fee was determined to be the most equitable solution. The Capacity Fee Report
and associated tables (Attachments 3 to 6) provide more detailed discussion.
A recommended ordinance to establish the following proposed Capacity Fees is attached:
Current
Proposed
$7,200 per RUE (Gravity Service)
$9,211 per RUE (Pumped Service) $8°182 per RUE (District -wide)
ALTERNATIVES/CONSIDERATIONS
The Board may decline to adjust the Schedule of Capacity Fees. In this event, the fees that went into
effect on July 1, 2022 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 nor would it eliminate the separate
Pumped Zone and corresponding Pumping Capacity Fee.
FINANCIAL IMPACTS
If the recommended Capacity Fees are adopted, staff estimates that approximately $450,000 in additional
Capacity Fee revenue would be generated by the change in FY 2023-24, assuming a projected additional
development of 750 RUEs.
COMMUNITY OUTREACH
Staff will conduct a coordinated outreach program to inform and solicit input from stakeholders
and interested customers regarding the proposed Capacity Fees. Notices of the public hearing will be
posted and published in the Contra Costa Times and San Ramon Valley Times. In addition, approximately 400
letter reports, including the proposed schedule of rates and charges, have been 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.
As of May 23, 2023, no stakeholders nor members of the public had contacted Central San with
comments. Any comments received after May 23, 2022 will be presented to the Board of Directors at
the public hearing.
COMMITTEE RECOMMENDATION
The Finance Committee reviewed this item at its May 9, 2023 meeting and recommended consideration
and approval of the proposed uncodified Ordinance.
June 1, 2023 Regular Board Meeting Agenda Packet - Page 115 of 165
Page 3 of 24
RECOMMENDED BOARD ACTION
Hold the public hearing. Once the public hearing has concluded:
Adopt the attached uncodified Ordinance No. 329 , revising the "Schedule of Capacity Fees, Rates and
Charges" effective July 1, 2023, 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.
• There is a strong and reasonable relationship between the actual added burden imposed by new
users and the proposed Capacity Fee.
• 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.
• The proposed fees, rates and charges are exempt from the California Environmental Quality Act
(CEQA) per section 6.12.020 of the District Code.
(Four affirmative votes are required for adoption.)
Strategic Plan Tie -In
GOAL ONE: Customer and Community
Strategy 2 - Promote initiatives to advance affordable and equitable access to services
ATTACHMENTS:
1. Proposed Ordinance
2. Proposed Ordinance ExhibitA
3. Report Regarding Capacity Fee Update
4. Report Table 1 (Fee Calculation)
5. Report Table 2 (Fee Comparison)
6. Report Table 3 (Useful Life)
7. Presentation
8. Raftelis Letter re Capacity Fee Review
June 1, 2023 Regular Board Meeting Agenda Packet - Page 116 of 165
Page 4 of 24
ATTACHMENT 1
ORDINANCE NO. 329
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, "," and the
Staff Report Regarding the Capacity Fee Update dated May 1, 2023; 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 1, 2023, 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.
June 1, 2023 Regular Board Meeting Agenda Packet - Page 117 of 165
Page 5 of 24
Ordinance No. 329
Page 2of3
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;
• 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. 324 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. 324 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.
June 1, 2023 Regular Board Meeting Agenda Packet - Page 118 of 165
Page 6 of 24
Ordinance No. 329
Page 3of3
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, 2023.
PASSED AND ADOPTED this 1 st day of June 2023, by the Board of Directors of the
Central Contra Costa Sanitary District by the following vote:
AYES:
Members:
NOES:
Members:
ABSENT:
Members:
Barbara D. Hockett
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
June 1, 2023 Regular Board Meeting Agenda Packet - Page 119 of 165
Page 7 of 24
EXHIBIT "A" ATTACHMENT 2
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 1, 2023. 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, 2023 in accordance with the provisions of
District Code Chapter 6.12.
Capacity Fee $8,182 per RUE*
*A residential unit equivalent (RUE) is a measure of sewage volume and strength
equivalent to a typical residential household.
Residential Unit Equivalence (RUE) Factors0)
Number of RUE = Unit of Measure Count Multiplied by the RUE Factor
Use
User Group
Unit of
Capacity Fee
Code
Measure(2)
RUE Factor
LU
Single-family residences
Dwelling Unit
1.000
LA
Multiple -family residences, apartments
Dwelling Unit
0.847
LD
Duplex
Dwelling Unit
0.847
LM
Mobile homes
Dwelling Unit
0.847
LT
Condominium
Dwelling Unit
0.847
LS
Accessory structure connected to
Dwelling Unit
0.847
sewer on same parcel with Single-
family residence (not meeting
Accessory Dwelling Unit(3) criteria)
LE
Accessory Dwelling Unit(3) — within
Dwelling Unit
0
existing space
LN
Accessory Dwelling Unit(3) — new
1,000 square feet
0.425
structure or existing units for which the
(sq. ft.)
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
Page 1 of 5
June 1, 2023 Regular Board Meeting Agenda Packet - Page 120 of 165
Page 8 of 24
Residential Unit Equivalence (RUE) Factors0)
Number of RUE = Unit of Measure Count Multiplied by the RUE Factor
Use
Code
User Group
Unit of
Measure(2)
Gravity Capacity
Fee RUE Factor
AB
Auto body / painting
1,000 sq. ft.
0.484
AD
Auto dealerships
1,000 sq. ft.
0.484
AL
Aircraft services
1,000 sq. ft.
0.484
AR
Auto repair / maintenance
1,000 sq. ft.
0.484
AS
Service stations
1,000 sq. ft.
0.484
BT
Transportation services
1,000 sq. ft.
0.432
AC
Car washes
1,000 sq. ft.
21.127
AW
Car washes with recycling
1,000 sq. ft.
3.522
BB
Barbers / beauty salons / pet grooming
1,000 sq. ft.
0.725
BC
Dry cleaners, no laundry
1,000 sq. ft.
0.259
BR
Retail sales
1,000 sq. ft.
0.259
BE
Equipment repair / repair services
1,000 sq. ft.
0.228
BK
Contractors / business services
1,000 sq. ft.
0.228
BN
Nurseries / lumberyards
1,000 sq. ft.
0.228
IL
Light industrial
1,000 sq. ft.
0.228
BH
Meeting halls / studios
1,000 sq. ft.
0.290
EA
Auditoriums / theaters
1,000 sq. ft.
0.290
EC
Cinemas
1,000 sq. ft.
0.290
EM
Entertainment
1,000 sq. ft.
0.290
EB
Bowling alleys
1,000 sq. ft.
0.311
BZ
Miscellaneous commercial
1,000 sq. ft.
0.510
EG
Golf courses / country clubs
1,000 sq. ft.
1.166
EH
Health clubs / spas
1,000 sq. ft.
1.166
ET
Tennis clubs
1,000 sq. ft.
1.166
IW
Warehouses
1,000 sq. ft.
0.136
BM
Markets
1,000 sq. ft.
0.556
BS
Supermarkets
1,000 sq. ft.
0.880
BX
Shopping centers
1,000 sq. ft.
1.057
OB
Business offices
1,000 sq. ft.
0.295
OF
Financial institutions / banks
1,000 sq. ft.
0.295
OG
Government offices
1,000 sq. ft.
0.295
OS
Fraternal / service offices
1,000 sq. ft.
0.295
OM
Medical offices
1,000 sq. ft.
0.637
OV
Veterinary clinics
1,000 sq. ft.
0.637
RD
Delicatessens (or other food service without
Type 1 hood)
1,000 sq. ft.
1.562
RN
Bars
1,000 sq. ft.
1.562
RI
Ice cream parlors
1,000 sq. ft.
1.562
RY
Yogurt shops
1,000 sq. ft.
1.562
Page 2 of 5
June 1, 2023 Regular Board Meeting Agenda Packet - Page 121 of 165
Page 9 of 24
Residential Unit Equivalence (RUE) Factors0)
Number of RUE = Unit of Measure Count Multiplied by the RUE Factor
Use
Gravity Capacity
Code
User Group
Unit of
Fee RUE Factor
Measure(2)
RS
Restaurants or other food service
1,000 sq. ft.
4.010
w/T pe 1 hood dine -in
RT
Restaurants or other food w/Type 1
1,000 sq. ft.
4.010
hood take-out
Patio seating in excess of 300 square
RC
feet(4), banquet facilities
1,000 sq. ft.
1.166
RB
Bakeries (retail)
1,000 sq. ft.
4.061
BL
Laundromats
1,000 sq. ft.
13.506
SF
Skilled nursing facilities
1,000 sq. ft.
2.216
Residential care facilities for the elderly
FE
1,000 sq. ft.
0.932
HP
Hospitals
1,000 sq. ft.
2.891
LH
Hotels / motels
1,000 sq. ft.
1.926
CH
Churches
1,000 sq. ft.
0.242
Schools with cafeteria and gym /
showers
Classroom
0.860
Schools with gym / showers and no
cafeteria
Classroom
0.774
Schools with cafeteria and no gym /
showers
Classroom
0.516
Schools without cafeteria or gym /
showers
Classroom
0.430
(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
June 1, 2023 Regular Board Meeting Agenda Packet - Page 122 of 165
Page 10 of 24
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
June 1, 2023 Regular Board Meeting Agenda Packet - Page 123 of 165
Page 11 of 24
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
June 1, 2023 Regular Board Meeting Agenda Packet - Page 124 of 165
CENTRAL CONTRA COSTA SANITARY DISTRICT
Report Regarding the Capacity Fee Update
May 1, 2023
INTRODUCTION
Page 12 of 24
ATTACHMENT 3
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 occurs 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 $2.3 billion) is much
greater than the value of future facilities expansion needed to accommodate future
customers. While Central San's FY 2022-23 Budget lists $1.4 billion 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.
Section 66013 of the California Government Code defines Capacity Charges for water
and sewer agencies as a charge for public facilities in existence at the time a charge is
imposed that are of proportional benefit to the person or property being charged. 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 included 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.
June 1, 2023 Regular Board Meeting Agenda Packet - Page 125 of 165
Page 13 of 24
Capacity Fee Update Report
Page 2
April 15, 2023
CALCULATION APPROACH
A significant change for FY 2023-24 is the elimination of the Pumped Zone Capacity
Fee. Historically, Central San had charged this fee in recognition of the value of the
additional assets within those portions of the district which use pump stations and force
mains to convey wastewater to the treatment plant. The overall purpose of the Capacity
Fee 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.
Increased capital spending on pump station projects led to a review and discussion of
the fee methodology with staff, District Legal Counsel, and Raftelis Financial
Consultants. A review of the pumped zone assets has indicated that the recent
investments in those assets have generally been paid for by all Central San customers,
not just those within the pumped zones and elimination of the Pumped Zone Capacity
Fee was determined to be the most practical solution.
The Capacity Fee is typically 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.
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. (Note that developer -contributed mains are excluded
from the total asset value to prevent double recovery of the asset value.)
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
June 1, 2023 Regular Board Meeting Agenda Packet - Page 126 of 165
Page 14 of 24
Capacity Fee Update Report
Page 3
April 15, 2023
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)
RECOMMENDED CAPACITY FEE
Staff recommends that the Board adopt Capacity Fees for Fiscal Year (FY) 2023-24 by
applying the valuation approach and facilities life cycles described above, resulting in
updated fee as follows:
Current Proposed
$7,200 per RUE (Gravity Service)
$8,182 per RUE (district -wide)
$9,211 per RUE (Pumped Service)
The change in the FY 2023-24 Capacity Fee represents a 13.6% increase from the prior
year Gravity Service fee. Of this increase, approximately 8.7% ($629) is due to the
inclusion of the pumped zone assets and approximately 4.9% ($353) is a result of the
increase in asset values.
The recommended fee calculation approach is a rational, practical, equitable and
defensible method to determine the financial burden of new connections. A breakdown
of the proposed Capacity Fees by asset category is presented in Table 1. Based on the
review of information in Table 1, the increases are a result of Central San's continued
capital improvement investment in its facilities. There is 7% change in the per -RUE
asset values over the previous year for District -renovated Mains and a 5% change in
the per -RUE asset values for the treatment plant. Table 2 shows a comparison of the
proposed Capacity Fees to those fees charged by neighboring agencies. The useful
service life assumptions for each asset category are included in Table 3.
June 1, 2023 Regular Board Meeting Agenda Packet - Page 127 of 165
CENTRAL CONTRA COSTA SANITARY DISTRICT
Report Regarding Capacity Fee Update
Table 1 - Capacity Fee Calculation FY 2023-24
(Equity buy -in. Asset values through 6/30/22)
Asset Cateogry1
Total Asset
Value
less
Contributed
Assets1,2
Net Asset
1
Value
Net Asset
Value per
RUE
FY 2022-23
Value per RUE
Change
($)
Change
N
Treatment Plant/Outfall
536,082,246
(148,435,317)
387,646,928
2,262
2,147
115
5.3%
Collection System
Trunks and Interceptors
385,667,737
0
385,667,737
2,250
2,111
139
6.6%
Contributed Mains
658,442,000
(658,442,000)
0
0
0
0
District -renovated Mains
314,216,036
0
314,216,036
1,834
1,717
117
6.8%
Pump Stations, Force Mains
107,848,185
0
107,848,185
629
2,011 4
note
note
Recycled Water
45,112,564
(13,533,769)
31,578,795
184
177
8
4.3%
General Improvements (no land)
80,168,139
(24,046,970)
56,121,169
327
319
8
2.6%
Major Repairs
11,075,103
(3,322,531)
7,752,572
45
51
(6)
-11.4%
Land
57,171,437
(3,025,113)
54,146,325
316
315
1
0.4%
Sewer Construction Fund Balance
86,362,644
0
86,362,644
504
543
(39)
-7.2%
less Outstanding Debt
(principle only)
(29,142,751)
0
(29,142,751)
(170)
(181)
11
-5.8%
TOTAL VALUES
2,253,003,340
(850,805,700)
1,402,197,640
Capacity Fee
$8,182 per RUE
Notes:
1. Original cost escalated to current dollars less depreciation except land which is original cost escalated by opportunity cost
2. Contributed Assets include grant -funded, developer dedications, and capital contributions from City of Concord
3. Net asset value divided by total RUES unless otherwise noted
4. Prior years' methodology included a separate 'pumped zone' with asset value divided by RUES in the pumped zone
5. Comparison not meaningful due to change in methodology
June 1, 2023 Regular Board Meeting Agenda Packet - Page 128 of 165
Page 16 of 24
ATTACHMENT 5
CENTRAL CONTRA COSTA SANITARY DISTRICT
Report Regarding Capacity Fee Update
Table 2 — Comparison of Capacity Fees
AGENCY CAPACITY FEE
Dublin San Ramon Services District
$16,169
West County Wastewater District
$10,244
Mt View Sanitary District
$10,184
Current Central San Pumped Zone
$9,211
PROPOSED Central San (district -wide)
$8,182
Current Central San Gravity Zone
$7,200
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
June 1, 2023 Regular Board Meeting Agenda Packet - Page 129 of 165
Page 17 of 24
ATTACHMENT 6
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
June 1, 2023 Regular Board Meeting Agenda Packet - Page 130 of 165
June 1, 2023
Capacity Fees
and Sewer
Service Charges
in Central San's
Pumped Zones
Thomas Brightbill, Senior Engineer
Danea Gemmell, Planning &
Development Services Division Manager
1
Page 18 of 24
2
June 1, 2023 Regular Board Meeting Agenda Packet - Page 131 of 165 1
Background
Pump stations and force mains are needed
to convey wastewater from approximately
29,000 parcels to Central San's Treatment
Plant
These parcels represent about 22% of �.a.
Central San's wastewater by flow and
strength* - o
M�
The zones cover
most of Martinez, Orinda, and Moraga
a good portion of San Ramon
a small portion of the Town of Danville
the community of Clyde and portions of North
Concord served by Central San
' 22% of the Residential Unit Equivalents or RUES
3
Current Practice
Sewer Service Charges
All parcels connected to the public
sewer pay an annual Sewer Service
Chari---
The
har¢
The Sewer Service Charge rates are the
same for the whole district
4
Capacity Fees
��—�'Pkasent,
0
Page 19 of 24
All new construction or expansion of
non-residential facilities pay a one-time
Capacity Fet-
Parcels in Central San's Pumped Zones
currently pay an additional Capacity Fee
June 1, 2023 Regular Board Meeting Agenda Packet - Page 132 of 165 2
Capacity Fees
Charged under the '=auitv Rllv-ir method where
new users pay for their fair share of the assets that
existing users have paid for. Equity Buy -in is a
nationally recognized methodology.
Parcels in Central San's Pumped Zones pay an
additional Capacity Fee based on the value of the
additional assets in the Pumped Zone (pump
stations and force mains).
5
Page 20 of 24
Principles of
Water Rates, Fees,
and Charges
Fiaaucing aed
Charges for
Wastewater
Systems
June 1, 2023 Regular Board Meeting Agenda Packet - Page 133 of 165 3
Key Issues
Inconsistency between Sewer Service Charge (one
rate for the whole district) and ipacity Fees
(separate rate for parcels in the Pumped Zones)
Page 21 of 24
Increased capital spending on pump station
projects makes a review of the fee methodologies
appropriate WO!!e
Continuing the separate Pumped Zone Capacity Fee
would not be equitable unless a separate Sewer Service
Charge in the Pumped Zone was established (where the
additional 'ewer Service ChargE would fund Pumped
Zone projects)
Alternatives
C�D CENTRAL SAN
June 1, 2023 Regular Board Meeting Agenda Packet - Page 134 of 165 4
Page 22 of 24
Alternatives
Several alternatives were discussed between staff,
District Legal Counsel and Raftelis Financial
Consultants
The most practical solution appears to be to
eliminate the separate Capacity Fee charged in
portions of Central San served by pump stations
0
Financial Impacts of Eliminating the
Pumped Zone Capacity Fee
Parcels in the Pumped Zones would stop paying the
additional one-time Pumped Zone Capacity Fee
The one-time Capacity Fee for all parcels would increase by
$629 per RUE (a total change of $982 when the changes to }
the value of all assets are taken into account) _--
Little or no change to overall revenue as the loss of f
Pumped Zone Capacity Fee revenue would be offset by a _--
slightly higher one-time Capacity Fee for all parcels
(no change to annual Sewer Service Charge rates or �—
rli
revenues) `
10
June 1, 2023 Regular Board Meeting Agenda Packet - Page 135 of 165 5
Page 23 of 24
Discussion
11
June 1, 2023 Regular Board Meeting Agenda Packet - Page 136 of 165 6
ATTACH NfgWJ 6 f 24
R RAFTELIS
May 17, 2023
Ms. Danea Gemmell
Central Contra Costa Sanitary District
5019 Imhoff Place
Martinez, CA 94553
Subject: Review of Capacity Fees for FY 2023-24
Dear Ms. Gemmell:
Raftelis Financial Consultants, Inc. (Raftelis) has reviewed the report titled 2023-2024 Capacity Fee Report
prepared by the District that documents the results of the capacity fee calculations.
We believe the report presents a reasonable analysis of the changes proposed for the capacity fees to be
implemented for FY 2023-24. The equity buy -in method is commonly used to calculate fee for agencies
such as Central San that have capacity in the existing system for new connections. The asset values are
calculated using the replacement cost less depreciation method which is the standard method used in the
industry for this purpose. In short, the methodology for the calculations is consistent with industry
standards and regulatory requirements.
The implementation of a uniform fee for the whole district is reasonable given that the recent investments
in the pumped zone assets have been paid by all district users.
In conclusion, it is our professional opinion that the capacity fee calculations meet industry standards and
regulatory requirements.
Sincerely,
RAFTELIS FINANCIAL CONSULTANTS, INC.
M
Sudhir Pardiwala
Executive Vice President
Raftelis Financial Consultants, Inc. (DBA Raftelis)
445 S. Figueroa Street, Suite 1925
Los Angeles, CA 90071
www.raftelis.com
O: 626 583 1894 / M: 626 827 8931 / E: spardiwala@raftelis.com
June 1, 2023 Regular Board Meeting Agenda Packet - Page 137 of 165