HomeMy WebLinkAbout04.a. CONDUCT PUBLIC HEARINGS ON THE FY 2010-2011 O&M, DEBT SERVICE FUND, SELF-INSURANCE BUDGETS & ESTABLISHMENT OF FY 2010-11 SEWER SERVICE CHARGE RATES, AND PLACE ON CCC TAX ROLL FOR COLLECTIONCentral Contra Costa Sanitary District ' ~ BOARD OF DIRECTORS POSITION PAPER Continued..from June 3, 2010 Board Meeting Date: June 17, 2010 No.: 4.a.:;_Public:.Hearings _ Type of Action: CONDUCT PUBLIC HEARING subject: CONDUCT PUBLIC HEARINGS TO RECEIVE PUBLIC COMMENT ON THE FY 2010-2011 OPERATIONS AND MAINTENANCE BUDGET, DEBT SERVICE FUND BUDGET AND THE SELF-INSURANCE FUND BUDGET, AND FOR THE ESTABLISHMENT OF THE FY 2010-2011 SEWER SERVICE CHARGE RATES, AND ON PLACING FY 2010-2011 SEWER SERVICE CHARGES ON THE COUNTY TAX ROLL FOR COLLECTION Submitted By: Initiating DeptJDiv.: DEBBIE RATCLIFF ADMINISTRATIVE / CONTROLLER FINANCE & ACCOUNTING REVIEWED AND RECOMMENDED FOR BOARD ACTION: D. Ratcr R. Musgrav ~M--j~~- James elly, General Manager ISSUE: The District Code and State law require public hearings for the establishment of the Sewer Service Charge rates for FY 2010-2011 and on placing the FY 2010-2011 Sewer Service Charges on the County tax roll for collection. An uncodified ordinance passed by four affirmative votes is needed to increase the Sewer Service Charge. A resolution passed by four affirmative votes is needed to place the charges on the Contra Costa County tax roll. Although not required by law, the District will hold a public hearing to receive public comment on the FY 2010-2011 Operations and Maintenance Budget, Debt Service Fund Budget and the Self-Insurance Fund Budget. RECOMMENDATION: Conduct two separate Public Hearings and upon their respective conclusions, take the following actions, if considered appropriate: Approve and adopt the FY 2010-2011 Operations and Maintenance Budget (O&M), Debt Service Fund Budget and Self-Insurance Fund Budget Approve an uncodified ordinance increasing the Sewer Service Charge by $16 for a total Sewer Service Charge of $327 per residential unit effective beginning FY 2010-2011. Approve a resolution authorizing collection of the 2010-2011 Sewer Service Charges on the County tax roll. N:WDMINSUPWDMINIPDSPAPER\Conduct Public Hearing 2010-2011 Budgets 8 SSC 06.03-10.doc POSITION PAPER Board Meeting Date: June 17 , 2010 sub/ecr. CONDUCT PUBLIC HEARINGS TO RECEIVE PUBLIC COMMENT ON THE FY 2010-2011 OPERATIONS AND MAINTENANCE BUDGET, DEBT SERVICE FUND BUDGET AND THE SELF-INSURANCE FUND BUDGET, AND FOR THE ESTABLISHMENT OF THE FY 2010-2011 SEWER SERVICE CHARGE RATES, AND ON PLACING FY 2010-2011 SEWER SERVICE CHARGES ON THE COUNTY TAX ROLL FOR COLLECTION FINANCIAL IMPACTS: The draft FY 2010-2011 O&M Budget is based on a $0 rate increase in the Sewer Service Charge for a total of $311 per residential unit equivalent, allocating $300 to Operations and Maintenance and $11 to the Sewer Construction Fund. At the January Financial Workshop, staff recommended a $16 Sewer Service Charge increase. In April, the Board approved sending a Proposition 218 Notice to property owners advising them of a possible Sewer Service Charge increase of up to $16 for a total Sewer Service Charge of $327. If the Board approves an increase in the Sewer Service Charge, staff recommends that it be allocated to the Sewer Construction Fund to support the capital program. Also, a $4.3 million allocation towards the unfunded liability associated with GASB 45 post retirement benefits is included in the draft 2010-2011 budget. This allocation will remain unencumbered until action by the Board. The proposed $16 Sewer Service Charge increase would generate approximately $2.6 million in new revenue for fiscal year 2010-2011 with the recommendation that it be allocated to the Sewer Construction Fund. From the total $327 Sewer Service Charge, $300 would be allocated to O&M and $27 to the Sewer Construction Fund. This allocation was set with the goal of restoring approximately a 10% O&M prudent reserve. The proposed budget would result in a decrease to O&M reserves at fiscal year end of $640,000 for a projected O&M reserve balance at June 30, 2011, of $5.5 million. ALTERNATIVES/CONSIDERATIONS: The Board could decide not to increase the Sewer Service Charge for FY 2010-2011, keeping the Sewer Service Charge at the current $311, or choose another amount of increase up to $16 which was included in the Proposition 218 Notice sent to customers in April. Effective with the 1982-1983 fiscal year, Contra Costa County imposed a fee for collecting the Sewer Service Charge on the tax roll. The County fee, which approximates $100,000 annually, is much more economical than the alternative of direct billing by the District. N:WDMINSUPWDMINIPOSPAPER\Conduct Public Headng 2010-2011 Budgets 8 SSC 06-03-t0.doc POSITION PAPER Board Meeting Date: June. 17 , 2010 Sub]ecr. CONDUCT PUBLIC HEARINGS TO RECEIVE PUBLIC COMMENT ON THE FY 2010-2011 OPERATIONS AND MAINTENANCE BUDGET, DEBT SERVICE FUND BUDGET AND THE SELF-INSURANCE FUND BUDGET, AND FOR THE ESTABLISHMENT OF THE FY 2010-2011 SEWER SERVICE CHARGE RATES, AND ON PLACING FY 2010-2011 SEWER SERVICE CHARGES ON THE COUNTY TAX ROLL FOR COLLECTION BACKGROUND: The FY 2010-2011 Operations and Maintenance Budget was submitted for review at the May 20, 2010, Board Meeting. A detailed presentation was made to the Board at that meeting and a copy of the overheads used is attached (see Attachment 1). A Proposition 218 notice, which requires the District to provide at least a 45 day notice to all rate paying property owners for a Sewer Service Charge rate increase, was sent in April 2010. Approximately 105,200 Proposition 218 notices were mailed. As of May 28, 2010, a total of 149 telephone calls, a-mails and letters have been received (see Attachment 2). This is less than .1 % of total notices mailed. Legal notices were published in the Contra Costa Times and the San Ramon Valley Times for the June 3, 2010, Public Hearing to receive public comment on the FY 2010- 2011 Operations and Maintenance Budget, Debt Service Fund Budget and the Self- Insurance Fund Budget, for the establishment of the Sewer Service Charge rate for FY 2010-2011, and on collection of the 2010-2011 Sewer Service Charges on the County tax roll. It is recommended that two separate hearings be held to consider the matters described. Hearing to receive aublic comment on the FY 2010-2011 Operations and Maintenance (O&M) Budget, Debt Service Fund Budget and Self-Insurance Fund Budget and for the establishment of the Sewer Service Charge rate up to $327 for FY 2010-2011: The FY 2010-2011 O&M Budget and Debt Service Fund Budget were submitted to the Board of Directors for initial review at the May 20, 2009, Board Meeting and the Self-Insurance Fund Budget was approved by the Board at the April 1, 2010, Board Meeting. All three are scheduled for approval and adoption at the June 3, 2010, Board Meeting. Upon approval of the three budgets and determination of adequate levels of reserves, the Board must establish the 2010- 2011 Sewer Service Charge rates. N:WDMINSUP\ADMIN\POSPAPER\Conduct Public Hearing 2010-2011 Budgets & SSC 06-03-10.doc POSITION PAPER Board Meeting Date: June 17 , 2010 sub/ecr. CONDUCT PUBLIC HEARINGS TO RECEIVE PUBLIC COMMENT ON THE FY 2010-2011 OPERATIONS AND MAINTENANCE BUDGET, DEBT SERVICE FUND BUDGET AND THE SELF-INSURANCE FUND BUDGET, AND FOR THE ESTABLISHMENT OF THE FY 2010-2011 SEWER SERVICE CHARGE RATES, AND ON PLACING FY 2010-2011 SEWER SERVICE CHARGES ON THE COUNTY TAX ROLL FOR COLLECTION Hearing to consider collection of the FY 2010-2011 Sewer Service Charges on the County tax roll: The law requires that a public hearing be held each year before the Sewer Service Charge can be placed on the County tax roll. The Sewer Service Charge has been collected on the County tax roll since inception of the service charge in 1976. Collection on the tax roll provides the most economical and efficient means for the District to collect the charges for approximately 105,000 accounts. RECOMMENDED BOARD ACTION: Conduct two separate public hearings and upon their respective conclusions, take the following actions, if considered appropriate: • Approve and adopt the FY 2010-2011 Operations and Maintenance Budget, Debt Service Fund Budget and Self-Insurance Fund Budget (requires 3 votes) and • Approve an uncodified ordinance increasing the Sewer Service Charge by $16 for a total Sewer Service Charge of $327 per residential unit effective beginning FY 2010-2011. (requires 4 votes) Approve a resolution authorizing collection of the FY 2010-2011 Sewer Service Charges on the County tax roll. (requires 4 votes) N:W,DMINSUPWDMIN\POSPAPER\Conduct Public Hearing 2010-2011 Budgets 8 SSC 06-03-t0.doc BASED ON $327 SEWER SERVICE CHARGE AND WILL BE MODIFIED IF BOARD APPROVES A DIFFERENT AMOUNT ORDINANCE NO. AN UNCODIFIED ORDINANCE OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT ADOPTING A SCHEDULE OF SEWER SERVICE CHARGE RATES IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.24.030 WHEREAS, the District has previously developed and instituted a Sewer Service Charge Program to finance the services and facilities furnished by the District, and WHEREAS, it is reasonable and necessary that all users of the District'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 District services and facilities; and WHEREAS, the Board of Directors of the District has reviewed the current Schedule of Sewer Service Charge Rates and has determined that the annual residential sewer service charge rate should be increased by $16.00 per living unit to $327.00 per living unit and that non-residential sewer service charge rates be increased by proportionally similar amounts as the residential sewer service charge rate; and WHEREAS, Chapter 6.24.030 of the District Code provides the enabling authority for the District to implement the proposed uncodified Schedule of Sewer Service Charge Rates; and WHEREAS, a properly noticed public hearing to receive comments and protests and to consider the proposed uncodified Schedule of Sewer Service Charge Rates was held on June 3, 2010; and WHEREAS, in adopting this Ordinance, the Board of Directors finds that: a. Written notices of the proposed increase in sewer service charge rates were sent by first class U.S. mail to every owner of property connected in the District at least 45 days prior to the Public Hearing on the proposed increase conducted on June 3, 2010. b. All written protests against the proposed increase in the sewer service charge rates, including those provided in person, by facsimile, email and U.S. mail, were considered and tallied at the Public Hearing conducted on June 3, 2010, and the District was not presented with protests by a majority of the owners of the identified parcels affected by this change. N:WDMINSUP\ADMIN\DIST-SEC\Ordinances\Oraft - SSC Ordinance 2010-11.DOC c. The amount of the charge imposed does not exceed the proportional cost of the service attributable to the properties receiving service and the charge is only imposed on those properties actually receiving service or for those which service is immediately available. d. This action is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15273 (a) (1-4) of the District CEQA Guidelines. NOW, THEREFORE, the Board of Directors of the District does ordain as follows: Section 1 (To be Uncodified) The "Schedule of Sewer Service Charge Rates' 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 6.24.030. As of the effective date of this Ordinance, Sewer Service Charges 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, parts of ordinances and any provision of Resolution 2008-063 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 Resolution 2008-063 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 Resolution 2008-063 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. Section 3 This Ordinance shall be a general regulation of the District and shall be published once in the Contra Costa Times, and the San Ramon Valley Times newspapers of general circulation within the District, and shall be effective on July 1, 2010. This ordinance shall be kept on file with the Secretary of the District. N:WDMINSUPWDMIN\DIST-SEC\Ordinances\Draft- SSC Ordinance 2010-11.DOC PASSED AND ADOPTED by the Board of Directors of the Central Contra Costa Sanitary District on the 171h day of June, 2010, 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 Elaine R. Boehme Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Approved as to form: Kenton L. Alm District Counsel N:WDMINSUPWDMIN\DIST-SEC\Ordinances\Draft - SSC Ordinance 2010-11.DOC EXHIBIT "A" Schedule of Sewer Service Charge Rates (Uncodified) This schedule of Sewer Service Charges (to be effective July 1, 2010, was established by Central Contra Costa Sanitary District Ordinance No. _, adopted June 3, 2010. User Group Fiscal Year 2010 - 2011 Residential (rate per living unit): Single Family Dwellings, Mobile Homes, Townhouses, Condominium Units, Multi-Famil Units $327.00 ~ Commercial INon-Industrial (rates per hundred cubic feet): Bakeries $8.36 Supermarkets w/garbage disposals $6.31 Mortuaries $5.95 Restaurants $6 1 g Others $3.03 Minimum Annual Charge - $340.00 Industrial (rates per unit specified): Wastewater Flow (million gallons per year) $1,668.00 Biochemical Oxygen Demand (1,000 lbs. per year) $695.00 Total Suspended Solids (1,000 lbs. per year) $497.00 Peak (Demand) Flow (million gallons per day) $200,418.00 Minimum Annual Charge $340.00 Special Discharge Permits 8 Contractual Agreements: Determined Individually Page 1 Schedule of Sewer Service Charge Rates (continued) N:W DMINSUPW DMI N\DIST-SEC\Ordinances\Draft - SSC Ordinance 2010-t t.DOC User Grou Fiscal Year 2010-2011 Mlxed Use (shared water meter; rates per hundred cubic feet): Rate Group XA $3.35 Rate Group XB $3.66 Rate Group XC $3 98 Rate Group XD $4 29 Rate Group XE $4.61 Rate Group XF $4.93 Rate Group XG $5.24 Rate Group XH $5.56 Rate Group XI $5 67 Rate Group XJ $6.51 Rate Group XK $6 82 Rate Group XL $7 14 Rate Group XM $7.45 Rate Group XN $~ ~~ Rate Group XO $8 09 Minimum Annual Charge $340.00 Page 2 Schedule of Sewer Service Charge Rates (continued) N:\ADMINSUPWDMIMDIST-SEC\Ordinances\Draft- SSC Ordinance 2010-11.DOC User Grou Fiscal Year 2010-2011 Institutional (rates per hundred cubic feet unless otherwise noted): Churches $3.03 Schools (Daycare, Preschool, University) $3.03 Schools (Elementary) $4.18 /student Schools (Intermediate) $4.42 /student Schools (High School) $4.671 student Fraternal 8 Service Organizations $3.03 Local & State Institutions $3.03 Other Tax Exempt (Except Federal) $3.03 Federal Institutions $3.03 Utilities with Special Tax Status ~ $3.03 Independent Living Facilities, Rest Homes, & Convalescent Hospitals $3.03 Minimum Annual Charge $340.00 Page 3 N:\ADMINSUP WDMIN\DIST-SEC\Ordinances\Draft - SSC Ordinance 2010-11.DOC RESOLUTION NO. 2010- A RESOLUTION DIRECTING THAT THE FY 2010-2011 SEWER SERVICE CHARGES BE COLLECTED ON THE COUNTY TAX ROLL WHEREAS, the District has previously developed and instituted a Sewer Service Charge Program for services and facilities furnished by the District to finance yearly Operation and Maintenance of the District; and WHEREAS, the Sewer Service Charge is collected through a direct charge to the users: and WHEREAS, the District Code provides that the District may elect to collect current and delinquent charges on the tax rolls as provided by Sections 5470 and following of the Health & Safety Code; and WHEREAS, it is considered to be economically and efficient to continue the existing practice and collect the Sewer Service Charges for the 2010-2011 fiscal year on the county tax roll; NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the Central Contra Costa Sanitary District, that the FY 2010-2011 Sewer Service Charges are to be collected on the County of Contra Costa tax roll. PASSED AND ADOPTED this 17th day of June 2010, by the District Board of the Central Contra Costa Sanitary District by the following vote: AYES: Members: NOES: Members ABSENT: Members COUNTERSIGNED: Elaine R. Boehme Secretary of the Central County of Contra Costa Approved as to form: Michael R. McGill President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California Contra Costa Sanitary District State of California Kenton L. Alm Counsel for the District N:WDMINSUPWDMIN\RATCLIFF\Resolution 2010-2011 sewer service charges.doc Attachment 1 2010-2011 OS~M BUDGET ASSUMPTIONS REVENUE ASSUMPTIONS: Sewer Service Charge - $311 $300 Allocated to 08.M $11 Allocated to Sewer Construction Total Budgeted Ad Valorem Tax $12.9 million: $5.7 M111Ion Allocated to Debt Service Fund $7.2 Million Allocated to Sewer Construction Fund EXPENSE ASSUMPTIONS: $7.5 Million allocation for GASB 45 post retirement benefits ($4.3 Million to Trust, remainder is retiree health premiums) Retirement Expense- 1.31% increase in rate Increases to Healthcare costs for active employees: - Healthnet-12.5% - Kaiser -11.2% Increases to Healthcare costs for retirees - Healthnet-16.1%Weighted Average - Kaiser - 7.6% Weighted Average Administrative Overhead percentage-117% (Of Capitalized Salary) Vacancy Factors: - 3% for Salaries - 4% for Benefits N:WDMINSUP~ADMINIRATCLIFF\Budget Overheads 2010-2011.doc u m h C a a M O ~ Qaj ~O ~ ~ N `- ~ ~ C O~ G ~ N ~ 3 c y v o ~ 4J M ~ N ^ ~ ~ W a y C t C O t • U 3 W H W d X W ~.~., ~ W W ~ ^ W m ~_ OC O N U ~ °o moo H N D Q O V ~ N p ~ ~ o•-ov a ~ .- ~ n ~ O U ~ ~' ~ •3 C C w O ~ v ° o ^ ~ v ~ ~o ~ ~ H O ~ ^ ~ y C t ~ C t? N ~ _ 3 U ~ a, M a C C o ° C ~ ~ a ^ W ' a 6 cc O C N N C w W a X W r 4) N Cl N y N N ~ C N C ~ C > c. > ~ W p: 8 a N d N N 9 B e v a w 9 LL J z q~ 3 a N Z_ Z OPERATING AND MAINTENANCE 2009-2010 BUDGET COMPARED TO 2010-2011 BUDGET (000 Omitted) 2009-2010 2010-2011 Budget Budget Increase (Decrease) Revenues $61,668 $_62,326 1.1% Expenses 59,746 62,966 5.4% Revenues Over Expenses 1 2 S64 Fund Balance 06/30/10 $5,523. Sewer Service Charge Rate (O&M Portion Only) $292 $300 Total Sewer Service Charge $321' $311-$327 "Budgeted a $10 SSC increase, however the Board chose to hold the SSC at $31 1. N: W DMINSUPW DMIN\RATCIIFF\Budgel Overheads 2010-2011.doc KEY LABOR COSTS - 08M (000 Omitted) Salaries ~ Wages Salary Vacancy Factor Retirement Medical Insurance Dental Insurance Workers' Compensation Benefit Vacancy Factor Capitalized Adm. Overhead All Other Total Labor Costs 2009-2010 2010-2011 Increase Budget Budget (Decrease) $24,557 $25,543 $986 (682) (705) (23) 8,148 8, 754 606 6,188 7,042 854 716 855 139 628 560 (68) (830) (965) (135) (3,460) (3,654) (194) 5.062 6.896 1,836 S40.327 S44.326 S3.999 N:WDMINSUPWDMINV2ATClIFFlBudget Overheads 2010-2011.doc KEY INCREASES 2009-2010 BUDGET TO 2010-2011 BUDGET (000 Omitted) Dollar Increase (Decrease) % Increase 2009-2010 Budget $59,746 Salaries (Includes 3% vacancy 963 4.0% factor) Benefits (Includes 4% vacancy 3 036 18 5 factor) , . Chemicals 162 10.1 Utilities (665) (12.6) Repairs & Maintenance 163 4.9 Hauling 8~ Disposal 3 .3 Professional 8. Legal (191) (27.6) Outside Services ~ (139) (6.1) Self Insurance (533) (38.5) Materials 8 Supplies 52 2.8 All Other 369 19.3 2010-2011 Budget $62,966 5.4% N:WDMINSUFMDMINV2ATCLIFF\Budget Overheads 2070-2011.doc DEBT SERVICE FUND 2010-2011 BUDGET (000 OmitFed) Revenue Debt Service $5,674 Interest Expense 2,062 Principal Payments 3,612 TOTAL $5,674 N:IADMINSUFWDMIN\RATCLIFF\BUdget Overheads 2010-2011.doc See June 3, 2010 Board Agenda Backup -Item 4.a. (Attachment 2) for responses to Proposition 218 notices that were mailed to property owners. 4.b. Public Hearings Continued from June 3, 2010 CENTRAL CONTRA COSTA SANITARY DISTRICT PUBLIC HEARING TO RECEIVE COMMENTS ON PLACING DELINQUENT CHARGES ON THE CONTRA COSTA COUNTY PROPERTY TAX ROLL SUGGESTED AGENDA JUNE 17, 2010 - 1. Request staff report. 2. Public hearing on Placing Delinquent Charges on the Contra Costa County Tax Roll: A. Open public hearing B. Receive public comment C. Close public hearing 3. Consider adoption of resolution directing that Delinquent Charges be collected on the Contra Costa County tax roll. A resolution of the Board of Directors passed by four affirmative votes is needed to place charges on the Contra Costa County tax roll. N:\SSC\Capacity Use\Ordinances\2010 Cap Use-CAD-AVAD-Delinquent Charge Ordinance\DelinquencieslAgenda Public Hearing 2010-11 Delinquent Chges Draft 6-03-10.doc