HomeMy WebLinkAbout07.a. DETERMINE IF PILOT PROGRAM FOR DEFERRED PAYMENT OF CONNECTION FEES EST BY RESOLUTION NO. 2009-034 BE ALLOWED TO EXPIRE ON JUNE 4, 2010. IF WILL BE EXTENDED, ADOPT A RESOLUTION & DETERMINE IF FEE TO RECOVER ADMINISTRATION COSTS OF THE PROGRAM SHOULDCentral Contra Costa Sanitary District
' BOARD OF DIRECTORS
POSITION PAPER
Board Meeting Date: JUne3,2010 No.: 7,a. Engineering_
Type of Action: ADOPT RESOLUTION
Subject: DETERMINE WHETHER THE PILOT PROGRAM FOR DEFERRED
PAYMENT OF CONNECTION FEES ESTABLISHED BY RESOLUTION NO. 2009-
034 SHOULD BE ALLOWED TO EXPIRE ON JUNE 4, 2010. IF THE PROGRAM IS
TO BE EXTENDED, ADOPT A RESOLUTION EXTENDING THE PROGRAM AND
DETERMINE IF A FEE TO RECOVER ADMINISTRATION COSTS OF THE
PROGRAM SHOULD BE CONSIDERED. IF SO, SET PUBLIC HEARING FOR
JULY 1, 2010
Submitted By: Initiating DeptJDiv.:
Jarred Miyamoto-Mills, Principal Engineer Engineering/Environmental Services
REVIEWED AND RECOMMENDED FOR BOARD ACTION:
~ ~~- ~
J. M amoto-Mills C A-~ K. Alm James .Kelly,
Gener I Manager
ISSUE: At its June 4, 2009 regular meeting, the Board of Directors adopted Resolution
No. 2009-034 establishing cone-year pilot program for deferred payment of connection
fees. The program will expire on June 4, 2010, unless it is extended by the Board of
Directors.
RECOMMENDATION: Take no action; allow the Pilot Program for Deferred Payment
of Connection Fees to expire on June 4, 2010. If the program is extended, staff
recommends a fee to recover the District's cost be considered.
FINANCIAL IMPACTS: Writing procedures, creating documents and completing legal
review required about $6,000 in staff labor and District Counsel effort; this was a one
time cost. Ongoing management and administration of the program, including
preparing and notarizing documents, corresponding with owners, recordkeeping and
recording of agreements and releases at the office of the Contra Costa County
Recorder has required about 220 hours of staff time to date at a cost of about $27,500
including the District's overhead. In addition, the opportunity cost of forgone interest
was about $6,500. So, the total cost for the one-year pilot program has been about
$40,000 or about $180 per residential unit where fees were deferred. Excluding the
setup costs, the District spent about $155 per residential unit.
ALTERNATIVES/CONSIDERATIONS: Alternatively, the Board may elect to adopt a
resolution to extend the program. If the Board chooses to extend the program, it could
consider setting a fee to recover the District's cost to administer the program. The
Building Industries Association of the Bay Area and Shapell Homes has each asked
that the program be continued.
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POSITION PAPER
Board Meeting Date: June 3, 2010
subject. DETERMINE WHETHER THE PILOT PROGRAM FOR DEFERRED
PAYMENT OF CONNECTION FEES ESTABLISHED BY RESOLUTION NO. 2009-
034 SHOULD BE ALLOWED TO EXPIRE ON JUNE 4, 2010. IF THE PROGRAM IS
TO BE EXTENDED, ADOPT A RESOLUTION EXTENDING THE PROGRAM AND
DETERMINE IF A FEE TO RECOVER ADMINISTRATION COSTS OF THE
PROGRAM SHOULD BE CONSIDERED. IF SO, SET PUBLIC HEARING FOR
JULY 1, 2010
BACKGROUND: In the Spring of 2009, the homebuilding community contacted
counties, cities and special districts including CCCSD, requesting that each agency
consider allowing deferred payment of impact and utility connection fees at the close of
escrow for new homes as allowed by recent legislation, rather than continuing the
current practice of collecting these fees when a building permit is issued or utility
service connections are made. The homebuilders believed that the then-prevailing
economic recession, specifically the credit and cash flow crisis, had resulted in an
inequitable and unjust situation for builders.
The Board considered the homebuilders' request, and at its June 4, 2009 regular
meeting, approved aone-year pilot program for deferred payment of connection fees,
finding that the situation constituted a "special circumstance" requiring suspension,
modification and relief from application of District Code provisions pertaining to the time
for payment of fees. The approved program allowed builders the option of signing a
promissory note and recordable agreement calling for payment of fees either upon
close of escrow, first occupancy, or after expiration of a two-year period from the
issuance of the Connection Permit, whichever event occurs first.
To date, two developers (Shapell Homes and Brookfield Homes) and three owners of
individual lots have opted to defer fees and charges under the pilot program. Amounts
that have been deferred and paid to date are as follows:
Number of Amount Amount Amount
Owner Units Deferred Paid Outstanding
Shapell Homes 180 $1,078,670 $ 518,375 $ 560,295
Brookfield Homes 34 239,066 239,066 0
Gallegos 1 5,298 0 5,298
Bragg 1 5,298 0 5,298
Maggi 4 21,192 0 21,192
TOTALS: 220 units $1,349,524 $ 757,441 $ 592,083
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POSITION PAPER
Board Meeting Date: June 3, 2010
subject. DETERMINE WHETHER THE PILOT PROGRAM FOR DEFERRED
PAYMENT OF CONNECTION FEES ESTABLISHED BY RESOLUTION NO. 2009-
034 SHOULD BE ALLOWED TO EXPIRE ON JUNE 4, 2010. IF THE PROGRAM IS
TO BE EXTENDED, ADOPT A RESOLUTION EXTENDING THE PROGRAM AND
DETERMINE IF A FEE TO RECOVER ADMINISTRATION COSTS OF THE
PROGRAM SHOULD BE CONSIDERED. IF SO, SET PUBLIC HEARING FOR
JULY 1, 2010
Fees for one of the two'single-unit deferrals are currently delinquent. This issue will be
considered at a public hearing also on the agenda for this Board meeting regarding
collecting delinquent amounts on the property tax roll.
While Brookfield Homes and three owners of very small projects initially made use of
the program in the summer of 2009, only one owner (Shapell Homes) has used the
program since that time. Staff recommends that the program be allowed to expire due
to the low usage and program cost.
The Building Industries Association of the Bay Area and Shapell Homes has each
asked that the program be continued.
RECOMMENDED BOARD ACTION: Take no action; allow the Pilot Program for
Deferred Payment of Connection Fees to expire on June 4, 2010.
Alternatively, the Board may elect to extend the program by adopting a resolution that
includes the following provisions:
A finding that special circumstances require continued suspension, modification
and relief from application of District Code Section 6.08.040 and Subsection
6.12.030D, pertaining to the time for payment of connection fees;
2. Approval for extension of the pilot program for a term to be determined by the
Board.
3. Authorization for staff to record program documents.
If the Board elects to extend the program, it should determine the term of the extension
and whether a fee should be considered to recover the costs for setup and
administration of the program.
If the program is to be extended and the Board wishes to consider assessing a fee,
staff recommends that the Board set July 1, 2010 as the date for a public hearing to
consider an ordinance to add a fee to the Schedule of Environmental and
Development-Related Rates and Charges pursuant to Chapter 6.30 of the District Code
to recover the setup and administration costs of the program.
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RESOLUTION NO. 2010-
A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT
FINDING THAT SPECIAL CIRCUMSTANCES REQUIRE CONTINUING
MODIFICATION, SUSPENSION, AND RELIEF FROM APPLICATION OF
DISTRICT CODE PROVISIONS PERTAINING TO THE TIME FOR PAYMENT
OF CONNECTION FEES; AND APPROVING AONE-YEAR EXTENSION OF
THE PILOT PROGRAM ALLOWING DEFERRED PAYMENT OF
CONNECTION FEES ESTABLISHED BY
RESOLUTION NO. 2009-034
WHEREAS, representatives of the homebuilding community have requested
that the Central Contra Costa Sanitary District (District) extend its program for
deferred payment of certain connection fees established by Resolution No.
2009-034, and as allowed by California Government Code Section 66007; and
WHEREAS, the District Board of Directors finds that the continuing economic
recession has resulted in a continuing inequitable and unjust situation for
builders, which constitutes a special circumstance requiring continued
suspension, modification and relief from application of District Code Section
6.08.040 and Subsection 6.12.030D, pertaining to the time for payment of
connection fees.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the
District as follows:
THAT the pilot program for deferred payment of annexation and capacity fees
established by Resolution No. 2009-034 is hereby extended for one year; and
THAT unless extended by the Board of Directors, the extended pilot program
will terminate on June 30, 2011; and
THAT, having determined that it is an appropriate staff function to sign and
record agreements and promissory note releases associated with the program,
the General Manager and/or his designee shall be authorized to record said
agreements and promissory note releases with the Recorder of Contra Costa
County.
Resolution No. 2010
Page 2 of 2
PASSED AND ADOPTED this 3rd day of June 2010, by the Board of
Directors of the Central Contra Costa Sanitary District by the following vote:
AYES: Members:
NOES: Members:
ABSENT: Members:
Michael R. McGill
President of the Board of Directors
Central Contra Costa Sanitary District
County of Contra Costa, State of California
COUNTERSIGNED:
Elaine R. Boehme
Secretary of the Central Contra Costa Sanitary District
County of Contra Costa, State of California
Approved as to form:
Kenton L. Alm
Counsel for the District
• RESOLUTION NO. 2009- 034
A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT
FINDING THAT SPECIAL CIRCUMSTANCES REQUIRE MODIFICATION, .
SUSPENSION, AND RELIEF FROM APPLICATION OF DISTRICT CODE
PROVISIONS PERTAINING TO THE TIME FOR PAYMENT OF CONNECTION FEES;
AND APPROVING AONE-YEAR PILOT PROGRAM ALLOWING DEFERRED
PAYMENT OF CONNECTION FEES FOR HOMES AND BUILDINGS CONSTRUCTED
ON VACANT PARCELS
WHEREAS, representatives of the homebuilding community have requested that public
agencies, including the Central Contra Costa Sanitary District (District) consider
allowing deferred payment of impact or connection fees at the close of escrow for new
homes, as allowed by California Government Code Section 66007; and
WHEREAS, the District Board of Directors finds that the impacts of the current
economic recession, specifically the credit and cash flow crisis, has resulted in an
inequitable and unjust situation for builders, which constitutes a special circumstance
requiring suspension, modification and relief from application of District Code Section
6.08.040 and Subsection 6.12.030D, pertaining to the time for payment of connection
fees; and
• WHEREAS, the District Board of Directors passed a motion at its regular meeting on
May 7, 2009, that directed staff to develop aone-year pilot program allowing builders to
defer payment of connection fees to the close of escrow, rather than requiring payment
of these fees when a connection permit is issued just prior to actual physical connection
of house plumbing to the public sewer; and
WHEREAS, staff developed a pilot program that will allow deferred payment of
annexation and capacity fees at close of escrow, and presented the proposal to the
Board of Directors of the District at its regular meeting on June 4, 2009.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the District as.
follows:
THAT the proposed one-year pilot program for deferred payment of annexation and
capacity fees is hereby approved; and
THAT staff is directed to implement the pilot program as soon as possible, by applying
the following conditions:
(1) Only homes or buildings being built on vacant parcels shall be eligible for the
fee deferral program;
• (2) Only annexation and capacity fees may be deferred. Other fees including
those for reimbursements, application, plan review and inspection shall
continue to be collected at the time of Connection Permit issuance;
Resolution 2009- 034
Page 2 of 2
(3) The annexation and capacity fee amounts assessed shall be those applicable
on the date of payment. That is, if a fee increase or decrease occurs between
the time of Connection Permit issuance and the time of payment, the new fees
shall be charged.
(4) Participation in the fee deferral program shall be at the builder's option. That is,
the builder may choose between paying applicable fees at the time of
Connection Permit issuance, or signing a promissory note and recordable
agreement calling for payment of fees either upon close of escrow, first
occupancy, or after expiration of a two-year period from the issuance of the
Connection Permit, whichever event occurs first.
(5) Unless extended by the Board of Directors, the pilot program will terminate on
June 4, 2010.
PASSED AND ADOPTED this 4th day of June 2009, by the Board of Directors of the
Central Contra Costa Sanitary District by the following vote:
AYES: Members:
•
NOES: Members:
ABSENT: Members:
,~ e
~'' COUNTERSIGNED:
,~
.Elaine R. Boehme
Hockett, Lucey, McGill, Menesini, Nejedly
None
None
.~.~ `T//. 6~4
~lar"iies A. Nejedly
President of the Board of Directors
Central Contra Costa Sahitary District
County of Contra Costa, State of California
Secretary`of the Central Contra Costa Sanitary District
'County of Contra Costa, State of California
Approved as to form: ~
. Kenton L. Alm
Counsel for the District