Grass Valley City Council
May 9, 2023

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City of Grass Valley Page S-1
Development Impact Fee Study
November 9, 2022
Executive Summary
The City of Grass Valley has retained NBS Government Finance Group to prepare this study to analyze the impacts of new development on several types of City capital facilities and to calculate impact fees based on that analysis. The methods used in this study are intended to satisfy all legal requirements of the U. S. Constitution, the California Constitution and the California Mitigation Fee Act (Government Code Sections 66000 et seq.) and the Quimby Act (Government Code Section 66477) where applicable.

Organization of the Report
Chapter 1 of this report provides an overview of the legal requirements for establishing and imposing such fees, and methods that can be used to calculate impact fees.

Chapter 2 contains data on existing and future development used in this report.

Chapters 3 through 7 analyze the impacts of development on specific types of facilities and calculate impact fees for those facilities. The facilities addressed in this report are listed by chapter below:

Chapter 3. Park Land, Park and Recreation Improvements and Trails Chapter 4. Fire Protection Facilities
Chapter 5. Police Facilities
Chapter 6. General Government Facilities
Chapter 7. Storm Drainage System Improvements
Chapter 8 analyses the basis for an administrative charge that the City may wish to add to the impact fees calculated in this report and Chapter 9 contains recommendations for adopting and implementing impact fees, including suggested findings to satisfy the requirements of the Mitigation Fee Act.

Development Projections
Chapter 2 of this report presents estimates of existing development in Grass Valley and a forecast of future development out to 2040. Future development shown in Chapter 2 indicates that the City’s population could increase by about 36% to almost 18,500 by 2040. Other measures of development such as employment and police and fire calls for service are projected to increase in the range of 18% to 28%.

The methods used to calculate impact fees in this report do not depend on assumptions about the rate or timing of future development. The future development projected in Chapter 2 may occur sooner or later than 2040 without affecting the validity of the impact fee calculations.

Chapter 2 also establishes values for factors such as population per unit, service population per unit, and police and fire calls per unit that are used in the impact fee calculations.

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It is important to note that because of provisions of AB 602 that were incorporated into California law effective in 2022, impact fees for residential development in this study are based on unit size categories rather than unit type (e.g., single-family or multi-family units).

Impact Fee Analysis
The impact fee analysis for each type of facility addressed in this report is presented in a separate chapter. In each case, the relationship, or nexus, between development and the need for a particular type of facility is defined in a way that allows the impact of additional development on facility needs to be quantified.

The impact fees are based on capital costs for facilities and other capital assets needed to mitigate the impacts of additional development. Impact fees may not be used for maintenance or operating costs. Impact fees calculated in this report are shown on page S-5 of this Executive Summary.

The following paragraphs briefly discuss the methods used to calculate impact fees for the facilities addressed in this study.

Parks and Recreation Facilities. Chapter 3 of this report calculates impact fees for park land acquisition, park and recreation improvements and trails. The cost of park maintenance vehicles and equipment is included in the cost of park and recreation improvements. The following paragraphs discuss the three types of impact fees calculated in Chapter 3.

Park Land Impact Fees. The City has a Quimby Act ordinance that governs park land dedication and fees in lieu of dedication for residential development involving a subdivision or parcel map.

This study calculates a separate park land impact fee that can be applied to residential development that does not involve a subdivision and therefore is not subject to Quimby Act inlieu fees. These fees are based on the relationship between the City’s current population and existing park acreage.

Park and Recreation Improvement Impact Fees. The park and recreation impact fees in Chapter 3 are based on the relationship between the City’s existing population and the replacement cost of existing park and recreation improvements. Park maintenance vehicles and equipment are also included. Costs for facilities funded by Measure E are excluded from the impact fee analysis.

Trail Impact Fees. Impact fees for trails are based on the relationship between the City’s existing population and the replacement cost of existing trails.

For all of the fees calculated in Chapter 3, the existing level of service is established as a cost per capita which is then converted into fees per unit of residential development based on the estimated average population per unit for each category of residential development defined in this report. Because parks and recreation facilities are intended to serve residents of the City, these fees apply only to residential development.

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Fire Protection Facilities. Chapter 4 calculates impact fees for fire protection facilities, including apparatus and vehicles, based on the existing level of service in the City. The existing level of service is defined as the relationship between the replacement cost of existing Fire Department capital assets and the number of calls for service per year received by the Fire Department. That relationship is stated as a cost per call for service per year.

As part of this study, NBS analyzed the distribution of Fire Department calls for service for a full year to determine the average number of calls per unit per year generated by different types of development. The impact fee per unit for each type of development is calculated by multiplying the cost per call by the number of calls per unit per year for that type of development. Fire protection impact fees are intended to apply to all types of new development in the City.

Police Facilities. Chapter 5 calculates impact fees for Police Department facilities and vehicles based on the existing level of service in the City. The existing level of service is defined as the relationship between the replacement cost of existing Police Department facilities, vehicles and equipment and the number of calls for service per year received by the Department. That relationship is stated as a cost per call for service per year.

As part of this study, NBS analyzed the distribution of Police Department calls for service for a full year to determine the average number of calls per unit per year generated by different types of development. The impact fee per unit for each type of development is calculated by multiplying the cost per call and the number of calls per unit per year for that type of development. Police impact fees are intended to apply to all types of new development in the City.

General Government Facilities. Chapter 6 calculates impact fees for Grass Valley’s general government facilities including City Hall, the corporation Yard, as well as a small number of general government vehicles. The impact of development on the need for those facilities is represented by service population, which is a weighted composite of resident population and employees of businesses in the City. See Chapter 2 for a more detailed discussion of service population. Impact fees for general government assets are based on the existing level of service which is defined as the relationship between the City’s existing service population the replacement cost of existing assets. That relationship is stated as a cost per capita of service population.

Chapter 6 also calculates impact fees for animal control facilities. Those fees assume that the need for animal control services is driven by residential development. The existing level of service for animal control facilities is defined as the relationship between the City’s existing population and the replacement cost of existing animal control facilities. That relationship is stated as a cost per capita of population.

The impact fees per unit for general government and animal control facilities for each category of development are calculated by multiplying the cost per capita by the population or service population per unit for that type of development.

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Impact fees for general government facilities are intended to apply all types of new development in the City. Impact fees for animal control facilities are intended to apply only to residential development.

Storm Drainage Impact Fees. In Chapter 7, this report updates storm drainage impact fees based on a list of improvement needs from a March 1986 Storm Drainage Master Plan. Costs for those improvements have been escalated to 2022 levels by the Grass Valley City Engineer. No cost is shown in Chapter 7 for some improvements that have been completed. Costs for storm drainage improvements are allocated to various types of development based on the added impervious surface area per acre for each type of development. Added impervious surfaces such as roofs and paving increase the amount of runoff into the drainage system. Impact fees for storm drainage improvements are calculated as per-acre fees rather than per-unit fees as is the case for other impact fees in this study.

In addition, the land use categories used to calculate storm drainage impact fees are not consistent with the categories of development used for other impact fees in this study, so the storm drainage impact fees are shown in a separate schedule from other impact fees in the next section.

Impact Fee Summary
Table S.1 on the next page summarizes the impact fees calculated in this report. Because they are based on acreage rather than units, storm drainage impact fees are shown separately in Table S.5. Blank areas in Table S.1 indicate that some impact fees are calculated only for residential development. Table S.1 does not show impact fees that would apply to public facilities and K-12 public schools, because the City is unable or unlikely to impose those fees.

Table S.1 also does not show impact fees for park land acquisition calculated in this study because they would apply to a relatively small percentage of new residential developments. Residential development involving a subdivision or parcel map would be subject to the requirements of the City’s Quimby Act ordinance instead. (See Municipal Code Chapter 17.86 for park land dedication and in-lieu fee requirements for subdivisions).

Also note that, as discussed previously, residential development categories shown in Table S.1 are defined in terms of unit size rather than the unit type because of changes to State law adopted in AB 602 and effective in 2022.

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November 9, 2022
Table S.2 shows the proposed impact fees from Table S.1 with the addition of a 0.6% administrative fee to cover the cost of periodic impact fee update studies. That percentage is calculated as the average annual cost of preparing an impact fee update study every five years ($10,000) divided by the projected annual revenue from impact fees ($1,663,931). That annual revenue estimate is based on 1/18th of the total impact fee revenue of $29,951,000 projected from 2023 to 2040 based on the proposed impact fees shown in Table S.1 and the amount of future development shown in Chapter 2. See Chapter 8 for more detail.

Table S.1: Summary of Proposed Citywide Impact Fees
Development
Type
Unit
Type 1
Park
Imprvmts Trails Fire Police
General
Gov't 2Total
Residential: <800 Sq. Ft. DU 2,700.99 265.67 295.23 404.33 1,047.89 $ 4,714.10 Residential: 800-1,200 Sq. Ft. DU 2,843.15 279.65 469.68 505.41 1,103.04 $ 5,200.93 Residential: >1,200-2,100 Sq. Ft. DU 2,985.31 293.63 603.88 606.49 1,158.19 $ 5,647.50 Residential: >2,100 Sq. Ft. DU 3,127.46 307.62 738.08 673.88 1,213.34 $ 6,060.38 Commercial KSF 372.31 1,419.94 529.17 $ 2,321.42
Hotel/Lodging Room 600.94 465.13 121.37 $ 1,187.44
Office KSF 102.39 219.69 470.91 $ 792.99
Medical Office KSF 663.49 1,412.88 451.49 $ 2,527.87
Hospital Facilities Bed 2,213.05 1,514.74 3,514.83 $ 7,242.62 Light Industrial KSF 44.20 120.72 208.75 $ 373.67
Manufacturing KSF 102.87 59.87 300.99 $ 463.74
Warehouse KSF 41.70 104.45 92.24 $ 238.39
College/University Students 1.53 3.08 48.55 $ 53.16
1 DU = dwelling unit; KSF = 1,000 gross square feet of building area; Room = hotel guest room; Bed = patient bed 2 General government impact fees include animal control impact fees Table S.2: Summary of Proposed Citywide Impact Fees Including 0.6% Administration Fee Development
Type
Unit
Type 1
Park
Imprvmts
Park
Trails Fire Police
General
Gov't 2
Total
Residential: <800 Sq. Ft. DU 2,717.47 267.29 297.03 406.79 1,054.28 $ 4,742.86 Residential: 800-1,200 Sq. Ft. DU 2,860.49 281.36 472.55 508.49 1,109.77 $ 5,232.66 Residential: >1,200-2,100 Sq. Ft. DU 3,003.52 295.42 607.56 610.19 1,165.26 $ 5,681.95 Residential: >2,100 Sq. Ft. DU 3,146.54 309.49 742.58 677.99 1,220.75 $ 6,097.34 Commercial KSF 374.58 1,428.60 532.39 $ 2,335.58
Hotel/Lodging Room 604.61 467.97 122.11 $ 1,194.69
Office KSF 103.02 221.03 473.78 $ 797.83
Medical Office KSF 667.54 1,421.50 454.24 $ 2,543.29
Hospital Facilities Bed 2,226.55 1,523.98 3,536.27 $ 7,286.80 Light Industrial KSF 44.47 121.46 210.03 $ 375.95
Manufacturing KSF 103.50 60.24 302.83 $ 466.56
Warehouse KSF 41.95 105.09 92.80 $ 239.84
College/University Students 1.54 3.10 48.84 $ 53.49
1 DU = dwelling unit; KSF = 1,000 gross square feet of building area; Room = hotel guest room; Bed = patient bed 2 General government impact fees include animal control impact fees

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Table S.3 shows the City’s existing impact fees. The City’s existing residential impact fees are defined in terms of unit type (e.g., single-family or multi-family) while the proposed impact fees are defined in terms of unit size categories. To make a comparison between the two sets of fees possible, Table S.3 equates the two smaller unit size categories with multi-family units and the two larger unit size categories with single-family units.

Another area where the comparison requires some adjustment is for hospital facilities. The proposed impact fees for hospital facilities are based on the number of beds while the City’s existing impact fees for hospitals are per 1,000 square feet (KSF). The relationship between beds and square footage in a typical community hospital is roughly 2,000 square feet per bed, so in Table S.3 we have doubled the fees per KSF to convert them into per-bed fees for comparison.

Table S.4 shows the difference between the existing impact fees in Table S.3 and the proposed impact fees including the administrative fee from Table S.2. Numbers in parentheses indicate that the proposed fees are lower than the existing fees.

Table S.3: Summary of Existing Impact Fees
Development
Type
Unit
Type 1
Park
Imprvmts Trails Fire Police
General
Gov't. Total
Residential: <800 Sq. Ft. DU 2,423.49 0.00 715.87 289.13 393.87 $ 3,822.36 Residential: 800-1,200 Sq. Ft. DU 2,423.49 0.00 715.87 289.13 393.87 $ 3,822.36 Residential: >1,200-2,100 Sq. Ft. DU 2,945.92 0.00 870.19 346.82 478.57 $ 4,641.50 Residential: >2,100 Sq. Ft. DU 2,945.92 0.00 870.19 346.82 478.57 $ 4,641.50 Commercial KSF 772.29 635.05 256.96 $ 1,664.30
Hotel/Lodging Room 164.75 126.88 54.93 $ 346.56
Office KSF 1,005.77 288.14 334.98 $ 1,628.89
Medical Office KSF 939.51 472.71 312.51 $ 1,724.73
Hospital Facilities Bed 782.82 229.87 260.82 $ 1,273.51 Light Industrial KSF 534.73 91.36 18.55 $ 644.64
Manufacturing KSF 391.61 49.95 138.13 $ 579.69
Warehouse KSF 295.40 64.89 98.75 $ 459.04
College/University N/A No Existing Fee
1 DU = dwelling unit; KSF = 1,000 gross square feet of building area; Room = hotel guest room; Bed = patient bed

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Table S.5 shows the proposed storm drainage impact fees. Unlike the other impact fees calculated in this study, the storm drainage fees are calculated per-acre rather than per-unit. The land use categories for those fees also differ from the development types used for other impact fees in this study because of the data available to calculate those fees.

Table S.4: Difference Between Existing and Proposed Citywide Impact Fees Development
Type
Unit
Type 1
Park
Imprvmts
Park
Trails Fire Police
General
Gov't. Total
Residential: <800 Sq. Ft. DU 293.98 267.29 (418.84) 117.66 660.41 $ 920.50 Residential: 800-1,200 Sq. Ft. DU 437.00 281.36 (243.32) 219.36 715.90 $ 1,410.30 Residential: >1,200-2,100 Sq. Ft. DU 57.60 295.42 (262.63) 263.37 686.69 $ 1,040.45 Residential: >2,100 Sq. Ft. DU 200.62 309.49 (127.61) 331.17 742.18 $ 1,455.84 Commercial KSF (397.71) 793.55 275.43 $ 671.28
Hotel/Lodging Room 439.86 341.09 67.18 $ 848.13
Office KSF (902.75) (67.11) 138.80 $ (831.06)
Medical Office KSF (271.97) 948.79 141.73 $ 818.56
Hospital Facilities Bed 1,443.73 1,294.11 3,275.45 $ 6,013.29 Light Industrial KSF (490.26) 30.10 191.48 $ (268.69)
Manufacturing KSF (288.11) 10.29 164.70 $ (113.13)
Warehouse KSF (253.45) 40.20 (5.95) $ (219.20)
1 DU = dwelling unit; KSF = 1,000 gross square feet of building area; Room = hotel guest room; Bed = patient bed Table S.5: Proposed Storm Drainage Impact Fees
Development Impact Fee Impact Fee +
Type per Acre Admin Fee 1
Residential: <1,200 Sq. Ft. 2,583.25 $ 2,598.75 $
Residential: >1,200 Sq. Ft. 1,722.17 $ 1,732.50 $
Commercial/Office $ 3,465.00 3,444.34 $
Hotel/Lodging
Office
Medical Office
Hospital Facilities
Industrial $ 3,465.00 3,444.34 $
Light industrial
Manufacturing
Warehouse
Public/Quasi-Public $ 1,905.75 1,894.39 $
K-12 Public Schools
College/University
1 Impact fees including the 0.6% administrative fee

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Development Impact Fee Study
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Chapter 1. Introduction
Purpose
The purpose of this study is to analyze the impacts of development on the need for several types of public facilities provided by the City of Grass Valley and to calculate impact fees based on that analysis. This report documents the approach, data and methodology used in this study to calculate impact fees.

The methods used to calculate impact fees and in-lieu fees in this report are intended to satisfy all legal requirements governing such fees, including provisions of the U. S. Constitution, the California Constitution and the California Mitigation Fee Act (Government Code Sections 66000- 66025.

Legal Framework for Developer Fees
This brief summary of the legal framework for development fees is intended as a general overview. It was not prepared by an attorney and should not be treated as legal advice.

U. S. Constitution. Like all land use regulations, development exactions, including impact fees, are subject to the 5th Amendment prohibition on taking of private property for public use without just compensation. Both state and federal courts have recognized the imposition of impact fees on development as a legitimate form of land use regulation, provided the fees meet standards intended to protect against “regulatory takings.” A regulatory taking occurs when regulations unreasonably deprive landowners of property rights protected by the Constitution.

In two landmark cases dealing with exactions, the U. S. Supreme Court has held that when a government agency requires the dedication of land or an interest in land as a condition of development approval or imposes ad hoc exactions as a condition of approval on a single development project that do not apply to development generally, a higher standard of judicial scrutiny applies. To meet that standard, the agency must demonstrate an "essential nexus" between such exactions and the interest being protected (See Nollan v. California Coastal Commission, 1987) and make an” individualized determination” that the exaction imposed is "roughly proportional" to the burden created by development (See Dolan v. City of Tigard, 1994).

Until recently, it was widely accepted that legislatively enacted impact fees that apply to all development in a jurisdiction are not subject to the higher standard of judicial scrutiny flowing from the Nollan and Dolan decisions. But after the U. S. Supreme Court decision in Koontz v. St.

Johns Water Management District (2013), state courts have reached conflicting conclusions on that issue.

In light of that uncertainty, any agency enacting or imposing impact fees would be wise to demonstrate a nexus and ensure proportionality in the calculation of those fees.

Defining the “Nexus.” While courts have not been entirely consistent in defining the nexus required to justify exactions and impact fees, that term can be thought of as having the three

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elements discussed below. We think proportionality is logically included as one element of that nexus, even though it was discussed separately in Dolan v. Tigard. The elements of the nexus discussed below mirror the three “reasonable relationship” findings required by the Mitigation Fee Act for establishment and imposition of impact fees.

Need or Impact. Development must create a need for the facilities to be funded by impact fees.

All new development in a community creates additional demands on some or all public facilities provided by local government. If the capacity of facilities is not increased to satisfy the additional demand, the quality or availability of public services for the entire community will deteriorate.

Impact fees may be used to recover the cost of development-related facilities, but only to the extent that the need for facilities is related to the development project subject to the fees.

The Nollan decision reinforced the principle that development exactions may be used only to mitigate impacts created by the development projects upon which they are imposed. In this study, the impact of development on facility needs is analyzed in terms of quantifiable relationships between various types of development and the demand for public facilities based on applicable level-of-service standards. This report contains all of the information needed to demonstrate compliance with this element of the nexus.

Benefit. Development must benefit from facilities funded by impact fees. With respect to the benefit relationship, the most basic requirement is that facilities funded by impact fees be available to serve the development paying the fees. A sufficient benefit relationship also requires that impact fee revenues be segregated from other funds and expended in a timely manner on the facilities for which the fees were charged. Nothing in the U.S. Constitution or California law requires that facilities paid for with impact fee revenues be available exclusively to development projects paying the fees.

Procedures for earmarking and expenditure of fee revenues are mandated by the Mitigation Fee Act, as are procedures to ensure that the fees are either expended in a timely manner or refunded. Those requirements are intended to ensure that developments benefit from the impact fees they are required to pay. Thus, over time, procedural issues as well as substantive issues can come into play with respect to the benefit element of the nexus.

Proportionality. Impact fees must be proportional to the impact created by a particular development project. Proportionality in impact fees depends on properly identifying development-related facility costs and calculating the fees in such a way that those costs are allocated in proportion to the facility needs created by different types and amounts of development. The section on impact fee methodology, below, describes methods used to allocate facility costs and calculate impact fees that meet the proportionality standard.

California Constitution. The California Constitution grants broad police power to local governments, including the authority to regulate land use and development. That police power is the source of authority for local governments in California to impose impact fees on development. Some impact fees have been challenged on grounds that they are special taxes imposed without voter approval in violation of Article XIIIA. However, that objection is valid only

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if the fees charged to a project exceed the cost of providing facilities needed to serve the project.

In that case, the fees would also run afoul of the U. S. Constitution and the Mitigation Fee Act.

Articles XIIIC and XIIID, added to the California Constitution by Proposition 218 in 1996, require voter approval for some “property-related fees,” but exempt “the imposition of fees or charges, as a condition of property development.” Thus impact fees are exempt from those requirements.

The Mitigation Fee Act. California’s impact fee statute originated in Assembly Bill 1600 during the 1987 session of the Legislature and took effect in January 1989. AB 1600 added several sections to the Government Code, beginning with Section 66000. Since that time, the impact fee statute has been amended from time to time, and in 1997 was officially titled the “Mitigation Fee Act.” Unless otherwise noted, code sections referenced in this report are from the Government Code.

The Mitigation Fee Act does not limit the types of capital improvements for which impact fees may be charged. It defines public facilities very broadly to include "public improvements, public services and community amenities." Although the issue is not specifically addressed in the Mitigation Fee Act, it is clear both in case law and statute (see Government Code Section 65913.8) that impact fees may not be used to pay for maintenance or operating costs. Consequently, the fees calculated in this report are based on the cost of capital assets only.

The Mitigation Fee Act does not use the term “mitigation fee” except in its official title. Nor does it use the more common term “impact fee.” The Act simply uses the word “fee,” which is defined as “a monetary exaction, other than a tax or special assessment…that is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project ….” To avoid confusion with other types of fees, this report uses the widely-accepted terms “impact fee” and “development impact fee” which both should be understood to mean “fee” as defined in the Mitigation Fee Act.

The Mitigation Fee Act contains requirements for establishing, increasing and imposing impact fees. They are summarized below. It also contains provisions that govern the collection and expenditure of fees and requires annual reports and periodic re-evaluation of impact fee programs. Those administrative requirements are discussed in the implementation chapter of this report.

Required Findings. Section 66001 (a) requires that an agency establishing, increasing or imposing impact fees, must make findings to:

1. Identify the purpose of the fee

2. Identify the use of the fee; and

3. Determine that there is a reasonable relationship between the use of the fee and the development type on which it is imposed

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4. Determine that there is a reasonable relationship between the need for the facility and the type of development on which the fee is imposed In addition, Section 66001 (b) requires that in any action imposing a fee as a condition of approval of a development project by a local agency, the local agency shall determine how there is a reasonable relationship between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed.

Some legal experts are of the opinion that the requirements of Section 66001 (a) apply when impact fees are based on a legislatively adopted fee schedule, while the requirements of Section 66001 (b) apply when impact fees are based on an administratively imposed (ad hoc) assessment. 1
The requirements outlined above are discussed in more detail below.

Identifying the Purpose of the Fees. The broad purpose of impact fees is to protect public health, safety and general welfare by providing for adequate public facilities. The specific purpose of the fees calculated in this study is to fund construction of certain capital improvements that will be needed to mitigate the impacts of planned new development on City facilities, and to maintain an acceptable level of public services as the City grows.

This report recommends that findings regarding the purpose of an impact fee should define the purpose broadly, as providing for the funding of adequate public facilities to serve additional development.

Identifying the Use of the Fees. According to Section 66001(a)(2), if a fee is used to finance public facilities, those facilities must be identified. A capital improvement plan may be used for that purpose but is not mandatory if the facilities are identified in a General Plan, a Specific Plan, or in other public documents. Section 66002 (b) requires that such capital improvement plans must be updated annually.

However, a new provision in Section 66016.5, which was added by AB 602 in 2021, requires that large jurisdictions adopt a capital improvement plan as part of an impact fee study. That requirement applies to impact fee studies adopted after January 1, 2022. “Large jurisdiction” means a county of 250,000 or more or any city within that county. The statute does not provide any detail about what must be included in the capital improvement plan or how it should relate to the impact fee study. And, that new requirement is inconsistent with the original language of Section 66001(a)(2), so it is unclear whether the annual update requirement in Section 66002(b) applies.
1 See “The Mitigation Fee Act’s Five-Year Findings Requirement: Beware Costly Pitfalls” by Glen Hansen, Senior Council, Abbott and Kindermann and Rick Jarvis, Managing Partner, Jarvis, Fay and Gibson, presented at the 2022 League of California Cities City Attorneys Spring Conference

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Reasonable Relationship Requirement. As discussed above, Section 66001 requires that, for fees subject to its provisions, a "reasonable relationship" must be demonstrated between:

1. the use of the fee and the type of development on which it is imposed;

2. the need for a public facility and the type of development on which a fee is imposed; and,

3. the amount of the fee and the facility cost attributable to the development on which the fee is imposed.

Although some legal experts contend that the third of these only pertains to “ad hoc” fees that are not part of a legislatively adopted fee schedule, we believe that all three are part of a complete “nexus” or “reasonable relationship” framework as discussed earlier. These three reasonable relationship requirements address the nexus and proportionality requirements often cited in court decisions as the standard for defensible impact fees. The term “dual rational nexus” is often used to characterize the standard used by courts in evaluating the legitimacy of impact fees. The “duality” of the nexus refers to (1) an impact or need created by a development project subject to impact fees, and (2) a benefit to the project from the expenditure of the fees.

However, although proportionality is reasonably implied in the dual rational nexus formulation, it was explicitly required by the Supreme Court in the Dolan case, and we prefer to list it as the third element of a complete nexus.

Development Agreements and Reimbursement Agreements. The requirements of the Mitigation Fee Act do not apply to fees collected under development agreements (see Govt. Code Section 66000) or reimbursement agreements (see Govt. Code Section 66003). The same is true of fees in lieu of park land dedication imposed under the Quimby Act (see Govt. Code Section 66477).

Existing Deficiencies. In 2006, Section 66001(g) was added to the Mitigation Fee Act (by AB 2751) to clarify that impact fees “shall not include costs attributable to existing deficiencies in public facilities,…” The legislature’s intent in adopting this amendment, as stated in the bill, was to codify the holdings of Bixel v. City of Los Angeles (1989), Rohn v. City of Visalia (1989), and Shapell Industries Inc. v. Governing Board (1991).

That amendment does not appear to be a substantive change. It is widely understood that other provisions of law make it improper for impact fees to include costs for correcting existing deficiencies.

However, Section 66001(g) also states that impact fees “may include the costs attributable to the increased demand for public facilities reasonably related to the development project in order to (1) refurbish existing facilities to maintain the existing level of service or (2) achieve an adopted level of service that is consistent with the general plan.” (Emphasis added.) Impact Fees for Existing Facilities. Impact fees may be used to recover costs for existing facilities to the extent that those facilities are needed to serve additional development and have the capacity to do so. In other words, it must be possible to show that fees used to pay for existing facilities meet the need and benefit elements of the nexus.

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Recent Legislation
Several new laws enacted by the State of California in 2019 to facilitate development of affordable housing will affect the implementation of in-lieu fees and impact fees calculated in this study. Below are brief overviews of some key bills passed in 2019.

SB 330 – The Housing Crisis Act of 2019. Amendments to existing law contained in SB 330 prohibit the imposition of new approval requirements on a housing development project once a preliminary application has been submitted. That provision applies to increases in impact fees and in-lieu fees, except when the resolution or ordinance establishing the fee authorizes automatic, inflationary adjustments to the fee or exaction.

AB 1483 – Housing Data: Collection and Reporting. AB 1483 requires that a city, county or special districts must post on its website a current schedule of its fees and exactions, as well as associated nexus studies and annual reports. Updates must be posted within 30 days.

SB 13 – Accessory Dwelling Units. SB 13 prohibits the imposition of impact fees on accessory dwelling units (ADUs) smaller than 750 square feet and provides that impact fees for ADUs of 750 square feet or more must be proportional to the square footage of the primary dwelling unit. The proportionality requirement means that impact fees for ADUs of 750 square feet or more must be calculated on a case-by-case basis during the approval process.

Existing law requires a water or sewer connection fee or capacity charge for an accessory dwelling unit requiring a new or separate utility connection to be based on either the accessory dwelling unit’s size or the number of its plumbing fixtures. SB 13 revises the basis for calculating the connection fee or capacity charge to either the accessory dwelling unit’s square feet or the number of its drainage fixture units.

AB 602 – Amendments to the Planning and Land Use Law and the Mitigation Fee Act. AB 602, which was passed and signed in 2021, adds section 65940.1 to the Planning and Land Use Law requiring cities, counties and special districts that have internet websites to post schedules of fees, exactions and affordability requirements, annual fee reports, and an archive of nexus studies on that website, and to update that information within 30 days after any changes.

AB 602 also adds Section 66016.5 to the Mitigation Fee Act imposing several new requirements for impact fees that go into effect on January 1, 2022, including:
 A nexus study must identify the existing level of service for each facility, identify the proposed new level of service (if any), and explain why the new level of service is appropriate.
 If a nexus study supports an increase in an existing fee the local agency shall review the assumptions of the nexus study supporting the original fee and evaluate the amount of the fees collected under the original fee.
 Large jurisdictions (counties over 250,000 and cities within those counties) must adopt a capital improvement plan as part of the nexus study.

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 All impact fee nexus studies shall be adopted at a public hearing with at least 30 days’ notice, and the local agency shall notify any member of the public that requests notice of intent to begin and impact fee nexus study of the date of the hearing.  Nexus studies shall be updated at least every eight years, from the period beginning on January 1, 2022.
 A nexus study adopted after July 1, 2022, shall calculate a fee imposed on a housing development project proportionately to the square footage of proposed units in the development. A nexus study is not required to comply with this requirement if the local agency makes certain findings specified in the law. A local agency that imposes a fee proportionately to the square footage of units in the development shall be deemed to have used a valid method to establish a reasonable relationship between the fee charged and the burden posed by the development.
 Authorizes any member of the public, including an applicant for a development project, to submit evidence that impact fees proposed by an agency fail to comply with the Mitigation Fee Act, and requires the legislative body of the agency to consider such evidence and adjust the proposed fee if deemed necessary.

SB 9, the California Housing Opportunity and More Efficiency (“HOME”) Act. SB 9 facilitates the subdivision of existing residential lots and allows for ministerial approval (without discretionary review or hearings) of no more than two dwelling units, including duplexes, on parcels zoned for single-family dwellings if the property satisfies certain requirements. To qualify under SB 9 the property must be located within either an urbanized area or urban cluster, as designated by the United States Census Bureau, or for unincorporated areas, within the boundaries of an urbanized area or urban cluster.

The law allows for qualifying lot splits to be approved ministerially upon meeting certain requirements.

Each parcel may not be smaller than forty (40%) percent of the original parcel size and each parcel must be at least one thousand two hundred (1,200) square feet in size unless permitted by local ordinance. The parcel must be limited to residential use.

The law does not allow demolition or alteration of certain types of dwellings, including: (a) housing that is subject to a recorded covenant, ordinance, or law that restricts rents to affordable levels; (b) housing subject to rent control; (c) housing that has been tenant-occupied in the last three years; or (d) housing located in a historic district. In addition, the proposed development may not demolish more than 25% of the exterior structural walls of an existing unit, unless expressly permitted by a local ordinance.

A local agency may impose objective zoning standards, subdivision standards, and design standards unless they would preclude either of the two units from being at least 800 square feet in floor area.

No setback may be required for an existing structure, or a structure constructed in the same location and dimensions as an existing structure. Otherwise, a local agency may require a setback of up to four feet from the side and rear lot lines. Off-street parking of up to one space per unit may be required by the local agency, unless the project is located within a half-mile walking distance of a high-quality transit corridor or a major transit stop, or if there is a car share vehicle within one block of the parcel. If a local agency makes a written finding that a project would create a specific, adverse impact upon public health and

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safety or the environment without a feasible way to mitigate such impact, the agency still may deny the project.

It is impossible to predict how much SB 9 will affect the number of future residential units constructed in the City. Unlike recent laws dealing with accessory dwelling units, SB 9 does not address the imposition of impact fees on the new dwelling units it allows, and it appears at this point that such units would be subject to the same impact fees as other new residential development.

Impact Fee Calculation Methodology
Any one of several legitimate methods may be used to calculate impact fees. The choice of a particular method depends primarily on the service characteristics of, and planning requirements for, the facility type being addressed. To some extent they are interchangeable, because they all allocate facility costs in proportion to the needs created by development.

Allocating facility costs to various types and amounts of development is central to all methods of impact fee calculation. Costs are allocated by means of formulas that quantify the relationship between development and the need for facilities. In a cost allocation formula, the impact of development represented by some attribute of development such as added population or added vehicle trips that represent the impacts created by different types and amounts of development.

Plan-Based or Improvements-Driven Method. Plan-based impact fee calculations are based on the relationship between a specified set of improvements and a specified increment of development. The improvements are typically identified in a facility plan, while the development is identified in a land use plan that forecasts potential development by type and quantity.

Using this method, facility costs are allocated to various categories of development in proportion to the service demand created by each type of development. To calculate plan-based impact fees, it is necessary to determine what facilities will be needed to serve a particular increment of new development.

With this method, the total cost of eligible facilities is divided by total units of additional demand to calculate a cost per unit of demand (e.g. a cost per capita for parks). Then, the cost per unit of demand is multiplied by factors representing the demand per unit of development (e.g. population per unit) to arrive at a cost per unit of development.

This method is somewhat inflexible in that it is based on the relationship between a specific facility plan and a specific land use plan. If either plan changes significantly the fees will have to be recalculated.

Capacity-Based or Consumption-Driven Method. This method calculates a cost per unit of capacity based on the relationship between total cost and total capacity of a system. It can be applied to any type of development, provided the capacity required to serve each increment of development can be estimated and the facility has adequate capacity available to serve the development. Since the cost per unit of demand does not depend on the particular type or quantity of development to be served, this method is flexible with respect to changing development plans.

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In this method, the cost of unused capacity is not allocated to development. Capacity-based fees are most commonly used for water and wastewater systems, where the cost of a system component is divided by the capacity of that component to derive a unit cost. However, a similar analysis can be applied to other types of facilities. To produce a schedule of impact fees based on standardized units of development (e.g. dwelling units or square feet of non-residential building area), the cost per unit of capacity is multiplied by the amount of capacity required to serve a typical unit of development in each of several land use categories.

Standard-Based or Incremental Expansion Method. Standard-based fees are calculated using a specified relationship or standard that determines the number of service units to be provided for each unit of development. The standard can be established as a matter of policy or it can be based on the level of service being provided to existing development in the study area.

Using the standard-based method, costs are defined on a generic unit-cost basis and then applied to development according to a standard that sets the number of service units to be provided for each unit of development.

Park in-lieu and impact fees are commonly calculated this way. The level of service standard for parks is typically stated in terms of acres of parks per thousand residents. A cost-per-acre for park land or park improvements can usually be estimated without knowing the exact size or location of a particular park. The ratio of park acreage to population and the cost per acre for parks is used to calculate a cost per capita. The cost per capita can then be converted into a cost per unit of development based on the average population per dwelling unit for various types of residential development.

Facilities Addressed in this Study
Impact/in-lieu fees for the following types of facilities are addressed in this report:
 Park Land and Park Improvements
 Fire Protection Facilities
 Police Facilities
 General Government Facilities
 Storm Drainage System Improvements
Each of those facilities is addressed in a separate chapter of this report, beginning with Chapter

3. Chapter 2 contains data on existing and future development used in the impact fee analysis.

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Chapter 2. Development Data
This chapter presents data on existing and future development that will be used to calculate impact fees in subsequent chapters of this report.

The information in this chapter may be used to establish levels of service, analyze facility needs, and allocate the cost of capital facilities among various types of development.

Land use and development data in this chapter are based on information from the U.S. Census Bureau and the American Community Survey (ACS), the California Department of Finance (DOF) Demographic Research Unit, the City of Grass Valley Community Development Department and other sources as noted in this chapter.

Study Area and Time Frame
The study area for this study is the Planning Area defined in Grass Valley’s 2020 General Plan.

The timeframe for this study extends from the present time to 2040. Although the future development projected in this chapter is expected to occur by 2040, the actual timing of development cannot be predicted with certainty. The impact fee calculations in this report do not depend on when that development occurs.

Development Types
The development types for which impact fees are calculated in this study are listed below.

Traditionally, impact fees for residential development are based on unit types such as singlefamily, multi-family and mobile home units.

However, AB 602, enacted in 2021, added Section 66016.5 to the Government Code. That section requires that, “[a] nexus study adopted after July 1, 2022, shall calculate a fee imposed on a housing development project proportionately to the square footage of proposed units of the development.” It further states that “[a] local agency that imposes a fee proportionately to the square footage of the proposed units of the development shall be deemed to have used a valid method to establish a reasonable relationship between the fee charged and the burden posed by the development.”
Consequently, the residential development categories used in this study are based on unit size rather than the type of unit. The list of development categories used in this study is shown below.

Residential: < 800 Sq. Ft.

Residential: 800 – 1,200 Sq. Ft.

Residential: >1,200 – 2,100 Sq. Ft.

Residential: > 2,100 Sq. Ft.

Commercial
Hotel/Lodging
Office
Medical Office
Hospital Facilities*
Light Industrial
Manufacturing
Warehouse
Public Facilities
K-12 Public Schools
College/University
* The Hospital Facilities category includes nursing homes and rehabilitation facilities.

Residential. The residential development categories used in this study are based on unit size and do not distinguish by unit type (e.g., single-family or multi-family).

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Commercial. The Commercial category includes retail commercial and commercial services as described in the Commercial land use designation in the Land Use Element of the General Plan.

Hotel and lodging uses are excluded from this category and are addressed in a separate category below.

Hotel/Lodging. This category encompasses hotels, motels, hostels, bed and breakfast establishments and similar lodging uses.

Office. The Office category includes development designed for general office uses.

Medical Office. The Medical Office category includes development designed for medical and dental offices, clinics, laboratories, and similar uses.

Hospital Facilities. This category includes hospitals, nursing homes, rehabilitation facilities and similar facilities intended primarily to provide in-patient services.

Light Industrial. This category includes development designed to accommodate a range of light industrial and service commercial uses, but not specifically intended for either large-scale manufacturing or warehousing.

Manufacturing. This category includes development designed for large-scale manufacturing operations.

Warehouse. This category includes development designed primarily for warehousing and storage, including self-storage facilities.

Public Facilities. This category includes government buildings and other public or quasi-public facilities including parks but excluding public schools and colleges which are addressed in separate categories, below. In many cases, the City may lack authority to charge impact fees to development in this category, or in the case of City facilities, it would be impractical to do so.

K-12 Schools. This category includes public schools from kindergarten through high school. The City has limited authority to charge impact fees to K-12 schools, except for water and sewer capacity charges. Private elementary and secondary schools would be treated as commercial uses or fees could be customized based on the impacts of a specific project as discussed in the section on other development types, below.

College/University. This category includes public and private colleges and universities.

Other Development Types. Certain types of development, such as churches and private schools, do not fit neatly into any of the categories listed above. Those developments are not legally exempt from impact fees, but no fee is calculated in this study for such uses. Fees for such developments can be calculated on an individual basis by considering factors such as service population or police and fire calls that will be generated by a proposed project and applying those factors to the cost per capita or cost per call shown in each impact fee chapter in this report.

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Residential Development and Population
The chart below shows the California Department of Finance (DOF) official January 1 population estimates for the City of Grass Valley for the years from 2012 through 2022, except for the 2020 population which is based on the 2020 Census count.

This chart shows a slight decline in
population from 2012 to 2019 and
then a sudden jump in 2020. That
appears to reflect underestimates by
the Department of Finance for several
years prior to 2020. After 2020, the
estimated population falls back
somewhat from the Census number.

The overall picture is one of slow
growth over the last 10 years. On
average the growth rate from 2012 to
2022 amounts to about 0.6% per
year. According to the data depicted
in this chart, Grass Valley has grown by 786 residents since 2012.

Units of Development
In this study, quantities of existing and planned development are measured in terms of certain units of development. Those units are discussed below.

Dwelling Units. Residential development is measured in terms of dwelling units (DUs).

Building Area. Many types of non-residential development in this study are measured in terms of building area in thousands of square feet, denoted as KSF.

Rooms. Development in the Hotel/Lodging category is measured in terms of rooms, meaning the number of guest rooms or suites.

Beds. Development in the hospital facilities category is measured by the number or patient beds.

Students. For both the K-12 Public Schools and the College/University categories, development is measured in terms of the number of students.

Demand Variables
In calculating impact fees, the relationship between facility needs and development must be quantified in cost allocation formulas. Certain measurable attributes of development such as population or police and fire department calls for service are used in those formulas to reflect the impact of different types and amounts of development on the demand for specific public services and the facilities that support those services.

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Those attributes are referred to in this study as “demand variables.” Demand variables are selected either because they directly measure service demand created by various types of development, or because they are reasonably correlated with that demand.

For example, the service standard for parks in a community is typically defined as a ratio of park acreage to population. As population grows, more parks are needed to maintain the desired standard. Logically, then, population is an appropriate yardstick or demand variable for measuring the impacts of development on the need for additional parks.

Each demand variable has a specific value for each type of development. Those values may be referred to as “demand factors.” For example, each of the residential unit size categories used in this study is associated with a specific population per unit Specific demand variables used in this study are discussed below. The values of demand factors used in this report are shown in Table 2.1 on page 2-9.

Population. Resident population is used as a demand variable to calculate impact fees for facilities like parks that are intended to serve residents of the City. Resident population is tied to residential development, so this variable reflects no demand from non-residential development.

Service Population. Population alone does not represent all of the impacts of development on the City’s administrative and general facilities such as City Hall and corporation yard facilities. A variable called service population is commonly used in this study to represent the impact of development on facilities that are impacted by both residential and non-residential development and do not have another useful demand variable.

Service population is a composite variable that includes both residents of the City and employees of businesses in Grass Valley. Resident population is included to represent the impacts of residential development and employees of business in the City are included to represent the impacts of non-residential uses, such as commercial, office and industrial development.

Because the impact of one new resident is not necessarily the same as the impact of one new employee, various components of the service population are weighted to reflect their relative impacts on demand for certain types of facilities.

Service population is intended to approximate the number of people creating a demand for service on an average day. It is difficult to estimate that number precisely for several reasons.

Some residents work in the City, some residents commute to work outside the City, and some residents don’t work at paid jobs. In addition, non-residents may be present in the City for work, shopping, recreation, or any number of other reasons.

In this study, residents are assigned a weight of 1.0. Our estimate of the average number of hours per week that residents spend in the City is based in part on an analysis of Census Bureau data on how many residents work in the city, how many commute to work outside the City. We assume the average resident spends eight hours a week outside the City for activities like shopping and recreation.

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Census Bureau American Community Survey (ACS) data for 2020 (the most recent available year) show that 86.6% of Grass Valley residents between ages 16 and 64 are employed. ACS data also indicate that about 35.8% of employed residents work outside the City.

Assuming that out-commuters spend 47.5 hours a week (9.5 hours per day) outside the City for work and commuting, and that all residents spend an average of eight hours a week outside the City for shopping and recreation leads us to the conclusion that out-commuters spend an average of 112.5 (168 – 47.5 - 8 = 112.5) hours per week in the City. Assuming other residents spend 160 (168 – 8 = 160) hours per week in the City, the weighted average for all residents is 153.1 hours per week in the City. Dividing that number by 168 hours per week gives us a weight of 0.911 for all residents (population) of the City.

Service population weights for employees associated with different types of development are based on estimates of the number of hours per week businesses of a certain type are in operation. This study assumes that retail and service commercial businesses operate 12 hours a day, 7 days a week (84 hours). For professional offices, industrial uses and public facilities, that number is estimated to be 45 hours (9 hours a day, 5 days a week). The weights assigned to employees of businesses associated with various types of non-residential development are based on the hours per week of operation divided by 168 total hours per week. The hours per week for each development as well as the weighting factor for each type of development are shown in Exhibit 2A on the next page. It should be noted that since all students in the K-12 Schools category are assumed to be residents of the City, the non-residential service population weight for that category is zero.

Those weights are intended to allow a balanced allocation of costs among non-residential development types. However, because of Grass Valley’s importance as a commercial and healthcare center in the regional economy, those base weights would understate the overall impact of non-residential development on the City’s daytime population, so a factor of 1.32 is applied to all non-residential service population weights except K-12 Schools, which brings the existing service population to 20,233, equal to the City’s daytime population as estimated in the City’s 2022 Strategic Plan Update.

Finally, for simplicity, all of the service population base weights are normalized by dividing them by residential base weight of 0.911 so that the normalized population weight equals 1.0 (0.911 /

0.911 = 1.0) and weights for each of the non-residential components are increased proportionately. The service population weights used in this study are shown in Exhibit 2A.

Service population per unit factors based on the normalized service population weights and the number of employees per unit are shown in Table 2.1.

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Police and Fire Calls for Service. The impact of development on the City’s police and fire facilities is measured by the number of calls for service per unit per year by development type. Those callsfor-service-per-unit factors are calculated using a random sample of calls for service for a oneyear period to determine the distribution of calls by development type. Then the number of calls per year for each type of development is divided by the number of existing units for that type of development to arrive at calls per unit per year. In this study, data for fire calls for service were for the period October 2, 2020, to October 2, 2021. Data for police calls for service factors were for calendar year 2019. We avoided using data for 2020 as much as possible because we have found in other studies that 2020 was not a typical year because of the COVID-19 pandemic. The police and fire calls-for-service factors for each type of development defined in this study are shown in Table 2.1.

Note on Impact Fees for Accessory Dwelling Units (ADUs). Recent amendments to Section 65852.2 of the Government Code provide that impact fees may not be imposed on ADUs smaller than 750 square feet. It also establishes the following requirement for impact fees imposed on ADUs of 750 square feet or more:
“Any impact fees charged for an accessory dwelling unit of 750 square feet or more shall be charged proportionately in relation to the square footage of the primary dwelling unit.” Exhibit 2A: Service Population Weights
Development Avg Hrs Total Hrs Base Svc Pop Scaling Scaled Svc Normalized Type per Wk per Week Weight 1Factor 2 Pop Weight 3Svc Pop Wt 4 Residential 153.1 168.0 0.911 1.00 0.911 1.000
Commercial 84.0 168.0 0.500 1.32 0.660 0.724
Hotel/Lodging 84.0 168.0 0.500 1.32 0.660 0.724
Office 45.0 168.0 0.268 1.32 0.354 0.388
Medical Office 36.0 168.0 0.214 1.32 0.282 0.310
Hospital Facilities 168.0 168.0 1.000 1.32 1.320 1.449
Light Industrial 45.0 168.0 0.268 1.32 0.354 0.388
Manufacturing 45.0 168.0 0.268 1.32 0.354 0.388
Warehouse 45.0 168.0 0.268 1.32 0.354 0.388
Public Facilities 45.0 168.0 0.268 1.32 0.354 0.388
K-12 Public Schools 0.0 168.0 0.000 1.00 0.000 0.000
College/University 12.0 168.0 0.071 1.32 0.094 0.103
1 Base service population weight = average hours per week / total hours per week; K-12 Public School students are assumed to be residents so they are given a service population weight of zero 2 Scaling factor is used to bring non-residential service population into alignment with non- residential demand for City serivces.
3 Scaled service population weight = base service population weight X scaling factor 4 Service population weight normalized to residential service population weight = scaled service population weight / residential service population weight

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Although it is not spelled out in Section 65852.2, we think it is obvious that when calculating ADU impact fees in cases where the primary unit is a single-family detached unit, the starting point for the proportionality calculation is the fee that applies to the single-family unit. The law also allows for ADUs on lots or parcels where the primary unit is a multi-family unit. In that situation, it seems logical that the ADU impact fee should be proportional to the impact fee that applies to the multifamily unit, but we think ADUs within multi-family developments are likely to be rare and we don’t address them further.

The formula for calculating proportional ADU impact fees would be:

Primary unit impact fee X (ADU square feet / Primary unit square feet) One thing that becomes obvious in that formula is that, for an ADU of a particular size, a larger primary unit results in lower impact fees for the ADU. For example, if the ADU is 1,000 square feet and the primary unit is 2,000 square feet, the proportional impact fee for the ADU would be 50% of the impact fee that would apply to the primary unit. But if the primary unit is 1,200 square feet, the impact fee for the same-sized ADU would be 83.33% of the primary unit fee.

It seems likely that discrepancy is an unintended consequence of language in Section 65852.2 that was not thoroughly considered before adoption. It is also worth noting that for impact fee studies adopted after July 1, 2022, AB 602 requires that impact fees for all types of residential units must be proportionate to the square footage of a unit. Impact fees based on square footage will tend to reduce the inequity created by the proportionality language of Section 65852.2 because the fees that apply to a smaller primary unit would be less than the fees that apply to a larger primary unit. However, it may be a number of years before most cities in California adopt residential impact fees based on square footage. The City could attempt to minimize the inequities created by the ADU impact fee proportionality requirement in Section 65852.2 by adopting a policy setting a lower limit on the primary unit square footage used to calculate impact fees for ADUs.

Demand Factors
Exhibit 2B shows how population-per-unit factors were estimated for residential unit size categories used in this study. The Census Bureau and Department of Finance collect data on population per unit by unit type (e.g., single-family or multi-family) rather than by unit size.

Consequently, we must estimate the population per unit for unit size categories.

Exhibit 2B shows the population per unit factors for the unit size categories used in this study.

Those factors were estimated by NBS using data on the distribution of units by number of bedrooms from the American Community Survey (ACS). The estimated population is adjusted so that the total population and average population per unit approximately equal the total population and average population per unit from known data. The population and number of units in this data set are slightly different from the 2022 numbers shown in Table 2.2, but those differences are not significant for this purpose.

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In Table 2.1 on the next page shows the demand factors used for each type of development defined in this study, including, the population-per-unit factors from Exhibit 2B. Those factors include population per unit for residential development and employees per unit for various types of non-residential development, as well as service population per unit and police and fire calls per unit per year for all types of development defined in this study.

Exhibit 2B: Population per Unit by Unit Size
Unit Size No. of No. of % of Pop at 2.01 Est Pop Adjusted in Sq Ft 1
Bedrms Units 2Units per Unit 3
per Unit 4Pop 5
<800 0 or 1 1,543 23.1% 3,101 1.90 2,932
800-1,200 2 3,179 47.5% 6,390 2.00 6,358
>1,200-2,100 3 1,688 25.2% 3,393 2.10 3,545
>2,100 4+ 276 4.1% 555 2.20 607
Total/Average 6,686 100.0% 13,439 2.01 13,442
1 Estimated square-feet-per-unit ranges based on number of bedrooms 2 Distribution of units by number of bedrooms from American Community Survey Table B25041, 2020 5-Year Estimates
3 Population for all units in each square-footage range if all units were occupied by the overall average of 2.01 persons per unit
4 Estimated population per unit by NBS
5 Adjusted population = number of units X estimated population per unit

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Existing and Future Development
Tables 2.2 through 2.4 on the following pages present data on existing and future development in Grass Valley. Data from those tables will be used throughout this report. Table 2.2 shows existing development as of January 2022.

It is important to note that in Tables 2.2 through 2.4, all residential development is grouped into a single category. The reason is that because of recent changes in state law, this study is required to calculate impact fees for unit-size categories rather than for unit types and we do not have data that would allow us to break out existing and future development into unit-size categories.

However, impact fees throughout this report will be calculated for each category of residential development.

Table 2.1: Demand Factors
Development Unit Pop/Students Empl per Svc Pop Fire Calls Police Calls Type 1Type 2per Unit 3Unit 4per Unit 5per Unit 6per Unit 7 Residential: <800 Sq. Ft. DU 1.90 1.90 0.220 1.200
Residential: 800-1,200 Sq. Ft. DU 2.00 2.00 0.220 1.200 Residential: >1,200-2,100 Sq. Ft. DU 2.10 2.10 0.530 1.900 Residential: >2,100 Sq. Ft. DU 2.20 2.20 0.530 1.900
Commercial KSF 1.50 1.09 0.277 4.214
Hotel/Lodging Room 0.35 0.25 0.448 1.380
Office KSF 2.50 0.97 0.076 0.652
Medical Office KSF 3.00 0.93 0.494 4.193
Hospital Facilities Bed 5.00 7.24 1.649 4.496
Light Industrial KSF 1.10 0.43 0.033 0.358
Manufacturing KSF 1.60 0.62 0.077 0.178
Warehouse KSF 0.50 0.19 0.031 0.310
Public Facilities KSF 2.50 0.97 1.250 11.686
K-12 Public Schools Students 1.00 0.00 0.009 0.058
College/University Students 1.00 0.10 0.001 0.009
1 The square-feet-per-unit ranges shown in this table for residential development include all types of residential development including single-family, multi-family and mobile homes 2 DU = dwelling unit; KSF = 1,000 gross sq ft of building area; Room = guest room or suite 3 Estimated average population per unit based on analysis of data from U. S. Census Bureau American Community Survey; see discussion in text
4 Employees per unit estimated by NBS using data from multiple sources including ESRI, the NCTC/ Grass Valley Travel Demand Forecasting Model and the Institute of Transportation Engineers (ITE) 5 Service population per unit = population, students or employees per unit X service population weight from Table 2.0; see discussion of service population weighting in text 6 Fire Department calls for service per unit per year based on analysis of a random sample of all 2019 calls for service; see discussion in text
7 Police Department calls for service per unit per year based on analysis of a random sample of all 2019 calls for service; see discussion in text

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Table 2.3 presents a forecast of future development in the City. The numbers in this table represent the difference between existing development in Table 2.2 and buildout development in Table 2.4.

Table 2.2: Existing Development January 1, 2022 - Grass Valley Development Unit No. of Popu- Emplo- Service Fire Calls Police Calls Type Type 1Units 2lation 3yees
4 Pop 5per Year 6per Year 7
All Residential DU 6,795 13,617 13,617 3,458 11,072
Commercial KSF 2,469 3,704 2,691 685 10,405
Hotel/Lodging Room 297 104 74 133 410
Office KSF 865 2,163 839 66 564
Medical Office KSF 269 807 250 133 1,128
Hospital Facilities Bed 228 1,140 1,651 376 1,025
Light Industrial KSF 1,002 1,102 431 33 359
Manufacturing KSF 287 459 178 22 51
Warehouse KSF 354 177 67 11 110
Public Facilities KSF 88 220 85 110 1,028
K-12 Public Schools Students 2,635 0 23 154
College/University Students 3,500 350 4 32
Totals 13,617 9,876 20,233 5,054 26,338
1 DU = dwelling unit; KSF = 1,000 gross sq ft of building area; Room = guest room or suite; Bed = patient bed
2 Number of existing residential units based on the January 2022 CA Department of Finance E-5 report; existing non-residential units based on 2018 data from the NCTC/Grass Valley Travel Demand Forecasting Model
3 Existing household population from 2020 Census
4 Existing employees = existing units X employees per unit from Table 2.1 5 Existing service population = existing units X service population per unit from Table 2.1 6 Fire Department calls for service per unit per year based on analysis of a random sample of all 2019 calls for service; see discussion in text
7 Police Department calls for service per unit per year based on analysis of a random sample of all 2019 calls for service; discussion in text

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Table 2.4 shows development in the City projected to 2040. Except for public facilities, 2040 units are based on projections in the NCTC/Grass Valley Travel Demand Forecast Model. Projections for future development in the Public Facilities category were adjusted by NBS based on a recent analysis of existing public facilities in Grass Valley.

Table 2.3: Future Development to 2040 - Grass Valley
Development Unit No. of Popu- Emplo- Service Fire Calls Police Calls Type Type 1Units 2lation 3yees
4 Pop 5per Year 6per Year 7
All Residential DU 2,432 4,874 4,874 1,238 3,963
Commercial KSF 401 601 437 111 1,690
Hotel/Lodging Room 0 0 0 0 0
Office KSF 364 910 353 28 237
Medical Office KSF 0 0 0 0 0
Hospital Facilities Bed 0 0 0 0 0
Light Industrial KSF 82 90 35 3 29
Manufacturing KSF 75 120 46 6 13
Warehouse KSF 11 6 2 0 3
Public Facilities KSF 14 35 14 18 164
K-12 Public Schools Students 349 0 3 20
College/University Students 419 42 0 4
Totals 4,874 1,762 5,803 1,406 6,124
Note: the numbers in Table 2.3 represent the difference between 2040 development in Table 2.4 and existing development in Table 2.2

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Growth Potential
The numbers in Table 2.4 represent an increase of 36% in population and 18% in employment between 2022 and 2040. Police and Fire Department calls are projected to increase 28%.

The fees calculated in subsequent chapters of this report are intended to pay for the capital facilities needed to serve the additional demand created by future development forecasted in this chapter. Most of the fees calculated in this report are based on the cost to maintain the existing level of service for various types of facilities, so that the amount of future development does not affect the impact fee calculations. For those facilities, future development is used only to project revenue from the impact fees.

To the extent the future development is used to calculate impact fees in this study, those calculations depend on the amount of future development, but not on when that development occurs.

Table 2.4: Total 2040 Development - Grass Valley
Development Unit No. of Popu- Emplo- Service Fire Calls Police Calls Type Type 1Units 2lation 3yees
4 Pop 5per Year 6per Year 7
All Residential DU 9,227 18,491 18,491 4,696 15,035
Commercial KSF 2,870 4,305 3,128 796 12,095
Hotel/Lodging Room 297 104 74 133 410
Office KSF 1,229 3,073 1,192 94 801
Medical Office KSF 269 807 250 133 1,128
Hospital Facilities Bed 228 1,140 1,651 376 1,025
Light Industrial KSF 1,084 1,192 466 36 388
Manufacturing KSF 362 579 224 28 64
Warehouse KSF 365 183 69 11 113
Public Facilities KSF 102 255 99 128 1,192
K-12 Public Schools Students 2,984 0 26 174
College/University Students 3,919 392 4 36
Totals 18,491 11,638 26,036 6,460 32,462
1 DU = dwelling unit; KSF = 1,000 gross sq ft of building area; Room = guest room or suite; Bed = patient bed
2 2040 units from the NCTC/Grass Valley Travel Demand Forecasting Model 3 2040 population = residential units X 2.06 average 2022 population per unit 4 2040 employees = units X employees per unit from Table 2.1 5 2040 residential service population = 2040 population; 2040 non-residential service population = units X service population per unit from Table 2.1 6 2040 fire calls for service = 2040 units X calls per unit per year from Table 2.1 7 2040 police calls for service = 2040 units X calls per unit per year from Table 2.1

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Chapter 3. Park Land and Park Improvements
This chapter calculates impact fees for park land acquisition, park improvements, maintenance equipment, and trails.

Methodology
This chapter calculates impact fees using the standard-based method discussed in Chapter 1.

Standard-based fees are calculated using a specified relationship or standard that determines the number of service units to be provided for each unit of development. All of the impact fees calculated in this chapter are based on the City’s existing level of service (LOS) as defined in the section titled Existing Facilities and Existing Level of Service, below. Impact fees calculated in that manner are designed to maintain the existing level of service as the City grows.

Service Area
The impact fees calculated in this chapter are intended to apply to all new residential development in the City, including portions of the City’s Sphere of Influence (SOI) that may be annexed in the future.

Demand Variable
A “demand variable” is a quantifiable attribute of development that is used in impact fee calculation formulas to represent the impact of development. The demand variable used to calculate impact fees for parks and other facilities in this chapter is population.

Population is used here because the need for parks and related facilities is almost universally defined in terms of population. The Grass Valley Parks and Recreation Master Plan follows that practice.

Impact fees calculated in this chapter for different categories of residential development will vary depending on the estimated average population per unit for each category. Table 2.1 in Chapter 2 shows the population-per-unit factors for each category of residential development defined in this study.

Because added population is associated with residential development, the impact fees calculated in this chapter apply only to residential development.

Existing Facilities and Existing Level of Service
Existing Parks. In this chapter, calculation of impact fees for park land acquisition and park improvements are based on the City’s existing ratio of improved park acres to population. Table

3.1 lists the City’s existing parks and shows both City-owned acres and improved acres of parks.

The improved acres shown in Table 3.1 also includes some acreage that is owned by the Grass Valley Unified School District and was improved by the City.

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Table 3.2 calculates the City’s existing level of service in terms of developed acres of Cityimproved park land per capita and per 1,000 population.

Existing Park Maintenance Equipment. Table 3.3 lists the City’s existing park maintenance equipment and the replacement cost for each item. The cost of park maintenance equipment will be incorporated into the impact fees for park improvements. Replacement cost is used here to reflect the cost of acquiring the additional equipment that will be needed to maintain additional parks needed to serve new development.

Table 3.1: Existing Parks
Park Park City-Owned Improved
Name Type Park Acres Park Acres
Condon Park Community 81.00 18.00
Memorial Park Community 7.40 7.40
Devere Mautino Park Community 12.90 6.45
Minnie Park Neighborhood 2.00 2.00
Morgan Ranch Neighborhood 4.00 0.00
Dow Alexander Park Pocket 0.30 0.30
Elizabeth Daniels Park Urban 0.15 0.15
Grass Valley USD Joint Use Agreement 0.00 4.00
Total 38.30 107.75
Source: City of Grass Valley General Plan Recreation Element and Parks and Recreation Master Plan with additional information provided by City staff Table 3.2: Existing Level of Service - Park Acres per Capita Total Improved
Park Acres 1
Existing
Population 2
Existing Acres
per Capita 3
Existing Acres
per 1,000 4

38.30 13,617 0.00281 2.81
1 See Table 3.1
2 See Table 2.2
3 Acres per capita = existing acres / existing population 4 Acres per 1,000 population = acres per capita X 1,000

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Existing Trails. Table 3.4 lists the City’s existing trails with their length in linear feet (LF) and their estimated replacement cost.

Cost Per Capita
Cost per Capita – Park Land. Below, we calculate a cost per capita for park land acquisition through impact fees. However, Grass Valley has an existing Quimby Act ordinance that establishes requirements for park land dedication or fees in lieu of dedication for residential subdivisions. Consequently, the park land impact fees calculated in this chapter are intended to apply only to residential development that does not involve a subdivision and is not subject to the Quimby Act. Table 3.5 calculates the cost per capita for park land acquisition based on the Table 3.3: Existing Park Maintenance Equipment
Description
Model
Year 1
Replacement
Cost 2
Post Hole Digger 1998 1,200 $
Aerator, John Deere 260S Aer-Way, x 1991 2,000 $
Generator, 8000 Watt Genarac w/ wheel kit 1991 2,000 $
Ford F250 4x2 P/U 2003 18,000 $
Ford F350 4x4 P/U 2012 40,000 $
Ford F350 4x4 P/U 2021 50,000 $
Tomco Equipment Trailer 1999 2,000 $
John Deere 4 x 2 Gator 2008 5,000 $
John Deer Tractor M301A, #108475 1974 7,500 $
Kubota RTV Utility Vehicle 2006 12,000 $
Grasshopper 932/3472 Lawnmower 2010 15,000 $
Grasshopper Mower 2001 12,000 $
Hurricane Blower 2020 12,000 $
Toro Reel Mower 2010 12,000 $
Tractor 3400 4x4, Hustler Mower 2002 17,000 $
J.D. Backhoe, compact Tractor & canopy 1990 18,000 $
Total $ 225,700
Source: Grass Valley City Engineer
Table 3.4: Existing Trails
Trail Name Length
(LF)
Unit Repl
Cost 1
Total Repl
Cost 2
Wolf Creek 5,280 200.00 $ 1,056,000 $
Litton Trail 2,640 200.00 $ 528,000 $
Peabody Creek Trail 1,600 200.00 $ 320,000 $
Total $ 1,904,000
Source: Grass Valley City Engineer

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existing ratio of park acres per capita from Table 3.2 and the estimated cost per acre to park land in Grass Valley.

Cost per Capita – Park Improvements. Table 3.6 calculates a cost per capita for park improvements based on the existing ratio of park acres per capita from Table 3.2 and the estimated average cost per acre for park improvements. The types of improvements covered by the estimated cost per acre shown in Table 3.6 are listed below. It should be noted that not every park will have all of these types of improvements.
 Turf, landscaping and irrigation
 Baseball, softball and soccer fields
 Tennis, pickleball, basketball and bocce courts
 Playgrounds and tot lots
 Picnic pavilions
 Rest room buildings
 Parking
It is also important to note that the park improvement impact fees calculated in this chapter do not include the cost of some major recreational facilities that were funded by Measure E and/or Community Development Block Grants. Those facilities include the new swimming pool complex at Memorial Park and the skate park and the LOVE Building at Condon Park.

Table 3.5: Cost per Capita - Park Land Acquisition
Acres per
Capita 1
Cost
per Acre 2
Cost per
Capita 3

0.00281 $50,000 $140.50
1 See Table 3.2
2 Land cost per acre estimated by Grass Valley City Engineer 3 Cost per capita = acres per capita X cost per acre
Table 3.6: Cost per Capita - Park Improvements
Acres per
Capita 1
Cost
per Acre 2
Cost per
Capita 3

0.00281 $500,000 $1,405.00
1 See Table 3.2
2 Cost per acre estimated by the Grass Valley City Engineer 3 Cost per Capita = acres per capita X cost per acre

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Cost per Capita – Park Maintenance Equipment. Table 3.7 calculates the cost per capita for park maintenance equipment based on the total replacement cost of existing equipment from Table

3.3 and the City’s existing population.

Cost per Capita – Trails. Table 3.8 calculates the cost per capita for trails based on the total replacement cost of existing trails from Table 3.4 and the City’s existing population.

Impact Fees per Unit
Impact Fees per Unit - Park Land Acquisition. Table 3.9 calculates impact fees per unit by residential development type for park land acquisition. Those fees are based on the per-capita cost from Table 3.5 and population per dwelling unit factors from Table 2.1. These fees would apply only to residential development not involving a subdivision.

Table 3.7: Cost per Capita - Park Maintenance Equipment Existing Vehicles &
Equipmt Repl Cost 1
Existing
Population 2
Cost per
Capita 3
225,700 13,617 $16.57
1 See Table 3.3
2 See Table 2.2
3 Cost per Capita = existing facilities replacement cost / existing population
Table 3.8: Cost per Capita - Trails
Existing Facilities
Replacement Cost 1
Existing
Population 2
Cost per
Capita 3
1,904,000 13,617 $139.83
1 See Table 3.4
2 See Table 2.2
3 Cost per Capita = existing facilities replacement cost / existing population

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Impact Fees per Unit - Park Improvements (Including Park Maintenance Equipment). Table 3.10 calculates impact fees per unit by residential development type for park improvements. These fees also incorporate the cost of park maintenance equipment. They are calculated using the combined per-capita costs for park improvements and park maintenance equipment from Tables

3.6 and 3.7 and the population per unit factors from Table 2.1.

Impact Fees per Unit – Trails. Table 3.11 calculates impact fees per unit by residential development type for trails. Those fees are based on the per-capita cost from Table 3.8 and population per dwelling unit factors from Table 2.1.

Table 3.9: Impact Fees per Unit - Park Land Acquisiiton Development
Type Units 1
Cost per
Capita 2
Population
per Unit 3
Impact Fee
per Unit 4
Residential: <800 Sq. Ft. DU $140.50 1.90 266.95 $
Residential: 800-1,200 Sq. Ft. DU $140.50 2.00 281.00 $ Residential: >1,200-2,100 Sq. Ft. DU $140.50 2.10 295. $ 05 Residential: >2,100 Sq. Ft. DU $140.50 2.20 309.10 $
1 DU = dwelling units
2 See Table 3.5
3 Population per DU; see Table 2.1
4 Impact fee per unit = cost per capita X population per unit Table 3.10: Impact Fees per Unit - Park Improvements
Development
Type Units 1
Cost per
Capita 2
Population
per Unit 3
Impact Fee
per Unit 4
Residential: <800 Sq. Ft. DU $1,421.57 1.90 2,700.99 $
Residential: 800-1,200 Sq. Ft. DU $1,421.57 2.00 2,843. $ 15 Residential: >1,200-2,100 Sq. Ft. DU $1,421.57 2.10 2, $ 985.31 Residential: >2,100 Sq. Ft. DU $1,421.57 2.20 3,127.46 $ 1 DU = dwelling units
2 Includes both park improvements and park maintenance vehicles and equipment; see Tables 3.6 and 3.7
3 Population per DU; see Table 2.1
4 Impact fee per unit = cost per capita X population per unit

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Projected Revenue
The impact fees per unit in the previous four tables are based on residential unit size in square feet. Although projections of future residential development are available based on unit type (e.g., single-family and multi-family), no projections are available based on unit size, so it is not possible to project revenue from these impact fees based on the number of units.

However, we do have projections of added population from Chapter 2, so potential revenue can be projected using added population and the cost per capita for park improvements, major recreation facilities and trails. No projection of potential revenue is provided for park land acquisition impact fees because it is unknown how much future residential development will be in subdivisions, which are subject to Quimby Act park land in-lieu fees rather than the park land impact fees calculated in this chapter.

Projected Revenue – Park Improvements (Including Maintenance Equipment). Table 3.12 calculates projected revenue for the park improvement impact fees, using the added population from Table 2.3 and the cost per capita from Table 3.10.

Projected Revenue – Trails. Table 3.13 calculates projected revenue for the trails impact fees, using the added population from Table 2.3 and the cost per capita from Table 3.11.

Table 3.11: Impact Fees per Unit - Trails
Development
Type Units 1
Cost per
Capita 2
Population
per DU 3
Impact Fee
per Unit 4
Residential: <800 Sq. Ft. DU $139.83 1.90 265.67 $
Residential: 800-1,200 Sq. Ft. DU $139.83 2.00 279.65 $ Residential: >1,200-2,100 Sq. Ft. DU $139.83 2.10 293. $ 63 Residential: >2,100 Sq. Ft. DU $139.83 2.20 307.62 $
1 DU = dwelling units
2 See Table 3.8
3 Population per DU; see Table 2.1
4 Impact fee per unit = cost per capita X population per unit Table 3.12: Projected Revenue - Park Improvement Impact Fees Added Cost Projected
Population 1per Capita 2Revenue 3
4,874 $1,421.57 $6,928,755.91
1 See Table 2.3
2 See Table 3.10
3 Projected revenue = added population X cost per capita

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Updating the Fees
The impact fees calculated in this chapter are based the current estimated cost of park land, park improvements and trails. We recommend that the fees be reviewed annually and adjusted as needed using local cost data or an index such as the Engineering News Record Construction Cost Index (CCI). See the Implementation Chapter for more on indexing of fees.

Nexus Summary
As discussed in Chapter 1 of this report, Section 66001 of the Mitigation Fee Act requires that an agency establishing, increasing or imposing impact fees, must make findings to:

Identify the purpose of the fee;
Identify the use of the fee; and,
Determine that there is a reasonable relationship between:
a. The use of the fee and the development type on which it is imposed; b. The need for the facility and the type of development on which the fee is imposed; and
c. The amount of the fee and the facility cost attributable to the development project.

Satisfying those requirements also ensures that the fees meet the “rational nexus” and “rough proportionality” standards enunciated in leading court decisions bearing on impact fees and other exactions. (For more detail, see “Legal Framework for Impact Fees” in Chapter 1.) The following paragraphs explain how the impact fees calculated in this chapter satisfy those requirements.

Purpose of the Fee: The purpose of the impact fees calculated in this chapter is to mitigate the impact of new residential development on the need for parks, recreation facilities and trails in Grass Valley.

Use of the Fee. Impact fees calculated in this chapter will be used to provide additional parks, recreation facilities and trails to mitigate the impacts of new residential development in the City.

Table 3.13: Projected Revenue - Trails
Added Cost Projected
Population 1per Capita 2Revenue 3
4,874 $139.83 $681,508.11
1 See Table 2.3
2 See Table 3.11
3 Projected revenue = added population X cost per capita

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As provided by the Mitigation Fee Act, revenue from impact fees may also be used for temporary loans from one impact fee fund or account to another.

Reasonable Relationship between the Use of the Fee and the Development Type on Which It Is Imposed. The impact fees calculated in this chapter will be used to provide additional parks, recreational facilities and trails to serve the needs of added population associated with new residential development in Grass Valley.

Reasonable Relationship between the Need for the Facilities and the Type of Development on Which the Fee Is Imposed. New development increases the need for parks, recreation facilities and trails to maintain the existing level of service as described earlier in this chapter. Without additional parks, recreation facilities and trails, the increase in population associated with new residential development would result in a reduction in the level of service provided to all residents of the City.

Reasonable Relationship between the Amount of the Fee and the Facility Cost Attributable to the Development Project. The amount of the impact fees for park land, park improvements, major recreation facilities and trails calculated in this chapter depend on the estimated increase in population associated with each category of residential development. The fees per unit of development calculated in this chapter for each type of residential development are based on the estimated average population per unit for that type of development in Grass Valley. Thus, the fee charged to a development project reflects the impact of that project on the need for parks, recreation facilities and trails in the City.

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Chapter 4. Fire Protection Facilities
This chapter calculates impact fees for facilities, apparatus and equipment needed to provide fire protection and emergency response services to new development in Grass Valley. Where the general term “facilities” is used elsewhere in this chapter, it is intended to include all types of capital assets needed by the Grass Valley Fire Department to carry out its mission.

The fire departments of Grass Valley and Nevada City merged in 2020, so that the Grass Valley Fire Department now also serves Nevada City under a contract between the two cities. The Department operates two fire stations in Grass Valley and one in Nevada City. The Grass Valley Fire Department also responds to emergency calls in the western portion of unincorporated Nevada County under an agreement with the Nevada County Consolidated Fire District.

The impact fees calculated in this chapter are based on the cost of City-owned fire facilities, apparatus and equipment located in Grass Valley and intended to serve the City of Grass Valley.

Service Area
The service area for impact fees calculated in this chapter is the City of Grass Valley. Those fees are intended to apply to all future development in the City, including portions of the Sphere of Influence (SOI) annexed in the future.

Demand Variable
A “demand variable” is a quantifiable attribute of development that is used in fee calculation formulas to represent the impact of development on a certain type of capital facilities. The demand variable used to calculate impact fees for fire facilities in this report is calls for service per year.

As part of this study, NBS analyzed a random sample of 570 of just over 5,000 calls for service received by the Grass Valley Fire Department in the City of Grass Valley from October 2, 2020, to October 2, 2021. That analysis was used to establish the number of calls for service per year originating from the various types of development defined in this study, which allowed us to determine the average number of calls per unit per year generated by each type of development.

Table 2.1 in Chapter 2 shows the calls-per-unit-per-year factors derived from that analysis. Those factors are used to calculate impact fees per unit later in this chapter.

It is worth noting that calls-per-unit rates for residential development could not be established by unit size, but were categorized by type of unit (e.g., single-family, multi-family or mobile home). The fire calls-per-unit factors shown in Table 2.1 and used in this analysis apply the multifamily rates to the two smaller unit-size categories and the single-family rate to the two larger unit-size categories.

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Methodology
This chapter calculates impact fees using the standard-based method discussed in Chapter

1. Standard-based fees are calculated using a specified relationship or standard that determines the number of service units to be provided for each unit of development.

Level of Service
In this case, the standard used to calculate impact fees is the existing level of service, defined as the replacement cost of existing fire protection facilities, apparatus and equipment divided by the total calls for service for the one-year 2020-2021 period to get a cost per call per year.

In 2021, AB 602 added Section 66016.5 to the Mitigation Fee Act. Among other things, after January 1, 2022, that section requires that if the level of service used in an impact fee study exceeds the existing level of service, the higher level of service must be justified. Using the existing level of service as the basis for the impact fees calculated in this chapter is consistent with the requirements of AB 602.

Facilities, Apparatus and Equipment
Table 4.1 lists the estimated replacement cost of Fire Stations #1 and #2. Fire Station #2 is on a site owned by Sierra College and leased to the City. The Grass Valley Fire Department also operates Fire Station #5 in Nevada City, but that station is not shown in Table 4.1 because it primarily serves Nevada City.

Table 4.2 lists the City’s existing firefighting apparatus and other vehicles. Costs for all vehicles and equipment reflect the estimated current dollar replacement costs as provided by City staff.

Equipment costs are included in the replacement cost figures. Costs for vehicles funded by Table 4.1: Existing Fire Stations
Constr Building Bldg Repl Site Est Land FF&E Repl Impact Fee Facility Date Sq Ft 1
Cost 2 Acres 3Value 4Cost 5Cost Basis 6
Fire Station #1 1985 4,923 2,619,036 $ 0.28 $32,200 $481,748 3,132,984 $ Fire Station #2 1999 4,500 2,395,424 Not City-Owned 231,611 $ 2,627,035 $ Total $ 5,760,019
1 Existing station square feet from the City's insured property schedule 2 Building replacement cost based on recent construction costs 3 Site acreage provided by the Grass Valley Fire Department 4 Land value based on $115,000 per acre
5 Replacement cost of furniture, fixtures and equipment (FF&E) from the City's insured property schedule
6 Impact fee cost basis = the sum of building replacement cost, estimated land value and the replacement cost of furniture, fixtures and equipment

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Measure E representing more than $2.6 million are excluded from the impact fee cost basis in Table 4.2.

Table 4.3 summarizes the costs from the preceding tables and adds the existing cash balance of the Fire Impact Fee Fund.

Cost per Call for Service
Table 4.4 calculates the cost per call for service for City fire facilities, apparatus and vehicles using the total cost basis from Table 4.3 and the existing number of calls for service per year.

Table 4.2: Existing Fire Department Apparatus and Vehicles Model Replacement Impact Fee
Year Description Assignment Cost 1
Cost Basis 2
2005 GMC Yukon Fire Prevention 2 25,000 $ 25,000 $
2015 Ford F250 4WD Pickup Fire Utility U5 57,000 $ 0 $
2015 Ford F250 Pickup Fire Utility U2 57,000 $ 0 $
2016 Ford F250 4WD Pickup Battalion Chief 77,000 $ 0 $
2017 Ford F250 4WD Pickup Fire Chief 1300 77,000 $ 0 $
2017 Ford F250 4WD Pickup Fire Utility U1 77,000 $ 0 $
2019 Dodge RAM 2500 Fire Prevention 3 65,000 $ 0 $
2019 Dodge RAM 5500 Squad 2 200,000 $ 0 $
2009 Spartan/Smeal Ladder Engine Truck 2 850,000 $ 850,000 $ 2003 KME Engine Engine 201 265,000 $ 0 $
2015 KME Engine Engine 202 565,000 $ 0 $
2017 KME Engine Engine 1 615,000 $ 0 $
2019 KME Engine Engine 2 630,000 $ 0 $
2021 Repair Unit Repair 1330 100,000 $ 100,000 $
2015 Explorer PPV Utility 35,000 $ 35,000 $
Total $ 3,695,000 $ 1,010,000
Table 4.3: Total Impact Fee Cost Basis
Total
Component Cost Basis 1
Existing Fire Stations 5,760,019 $
Existing Fire Apparatus and Vehicles 1,010,000 $
Fire Impact Fee Fund Balance 12,224 $
Total Cost 6,782,243 $
1 See Tables 4.1, and 4.2; DIF fund balance as of 6/30/22

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Impact Fees per Unit
Table 4.5 shows the calculation of fire facilities impact fees per unit of development, by development type. Those fees are calculated using the cost per call for service from Table 4.4 and the calls-per-unit-per-year factors from Table 2.1.

Table 4.4: Cost per Call for Service
Total Existing Calls Cost per Call
Cost Basis1for Service 2for Service 3
$6,782,243 5,054 $1,341.96
1 Total cost basis; see Table 4.3
2 Existing Fire calls for service per year ; see Table 2.2 3 Cost per call for service = total facility cost / existing calls for service per year
Table 4.5 Impact Fee per Unit
Development Cost per CFS Impact Fee
Type Units 1
CFS 2per Unit 3per Unit 4
Residential: <800 Sq. Ft. DU $1,341.96 0.220 295.23 $
Residential: 800-1,200 Sq. Ft. DU $1,341.96 0.350 469.6 $ 8 Residential: >1,200-2,100 Sq. Ft. DU $1,341.96 0.450 6 $ 03.88 Residential: >2,100 Sq. Ft. DU $1,341.96 0.550 738.08 $ Commercial KSF $1,341.96 0.277 372.31 $
Hotel/Lodging Room $1,341.96 0.448 600.94 $
Office KSF $1,341.96 0.076 102.39 $
Medical Office KSF $1,341.96 0.494 663.49 $
Hospital Facilities Bed $1,341.96 1.649 2,213.05 $
Light Industrial KSF $1,341.96 0.033 44.20 $
Manufacturing KSF $1,341.96 0.077 102.87 $
Warehouse KSF $1,341.96 0.031 41.70 $
Public Facilities KSF $1,341.96 1.250 1,677.44 $
K-12 Public Schools Students $1,341.96 0.009 11.71 $
College/University Students $1,341.96 0.001 1.53 $
1 DU = dwelling unit; KSF = 1,000 gross square feet of building area; Room = guest room or suite; Bed = patient bed
2 Cost per call for service per year; see Table 4.4
3 Calls for service per unit per year; see Table 2.1
4 Impact fee per unit = cost per call for service X calls for service per unit

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Projected Revenue
In Table 4.6, potential revenue from the fire facilities impact fees can be estimated by applying the cost per call for service from Table 4.4 to the added calls for service to 2040 shown in Table

2.3 in Chapter 2. This projection assumes that future development occurs as shown in Chapter

2. Although Table 4.5 calculates
impact fees for K-12 Schools and Public Facilities, the City either may not have authority, or would be unlikely to charge impact fees, to itself or other government agencies. Consequently, no projected revenue is shown for K-12 Schools or Public Facilities in Table 4.6. Revenue from those fees would amount to only about 1.3% of the total revenue projected in Table 4.6.

Updating the Fees
The impact fees calculated in this chapter are based current estimated replacement costs for fire facilities as shown in this chapter. We recommend that the fees be reviewed and adjusted annually using local cost data or an index such as the Engineering News Record Building Cost Index (BCI). See the Implementation Chapter for more on indexing of fees.

Table 4.6 Projected Revenue
Development Cost Added Projected
Type Units 1
per CFS 2CFS 3Revenue 4
All residential DU $1,341.96 1,238 1,660,876 $
Commercial KSF $1,341.96 111 149,297 $
Hotel/Lodging Room $1,341.96 0 0 $
Office KSF $1,341.96 28 37,271 $
Medical Office KSF $1,341.96 0 0 $
Hospital Facilities Bed $1,341.96 0 0 $
Light Industrial KSF $1,341.96 3 3,624 $
Manufacturing KSF $1,341.96 6 7,715 $
Warehouse KSF $1,341.96 0 459 $
Public Facilities KSF $1,341.96 18 23,484 $
K-12 Public Schools Students $1,341.96 3 4,088 $
College/University Students $1,341.96 0 643 $
Total $ 1,859,884
1 DU=dwelling unit; KSF=1,000 gross squre feet of building area 2 Cost per call for service per year; see Table 4.4
3 Added calls for service per year to 2040; see Table 2.3 4 Projected revenue = cost per call for service per year X added calls for service to 2040

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Nexus Summary
As discussed in Chapter 1 of this report, Section 66001 of the Mitigation Fee Act requires an agency establishing, increasing or imposing impact fees to make findings to:

Identify the purpose of the fee;
Identify the use of the fee; and,
Determine that there is a reasonable relationship between:
a. The use of the fee and the development type on which it is imposed; b. The need for the facility and the type of development on which the fee is imposed; and
c. The amount of the fee and the facility cost attributable to the development project.

Satisfying those requirements also ensures that the fees meet the “rational nexus” and “rough proportionality” standards enunciated in leading court decisions bearing on impact fees and other exactions. (For more detail, see “Legal Framework for Impact Fees” in Chapter 1.) The following paragraphs explain how the impact fees calculated in this chapter satisfy those requirements.

Purpose of the Fee: The purpose of the impact fees calculated in this chapter is to mitigate the impact of new development on the need for fire facilities, apparatus and vehicles provided by the City of Grass Valley.

Use of the Fee. Impact fees calculated in this chapter will be used to provide additional fire facilities, apparatus and vehicles to mitigate the impact of new development on the need for fire protection services in the City. As provided by the Mitigation Fee Act, revenue from impact fees may also be used for temporary loans from one impact fee fund or account to another.

Reasonable Relationship between the Use of the Fee and the Development Type on Which It Is Imposed. The impact fees calculated in this chapter will be used to provide additional fire facilities, apparatus and vehicles and to serve the added demand for fire protection and emergency services associated with new development in Grass Valley.

Reasonable Relationship between the Need for the Facilities and the Type of Development on Which the Fee Is Imposed. New development increases the demand for fire protection and other emergency services provided by the City. Without additional facilities, apparatus and vehicles, the increase in demand associated with new development would negatively impact the ability of the Grass Valley Fire Department to provide services efficiently and effectively to all development in the City.

Reasonable Relationship between the Amount of the Fee and the Facility Cost Attributable to the Development Project. The amount of the fire facilities impact fees charged to a development project will depend on the increase in calls for service associated with that project. The fees per unit of development calculated in this chapter for each type of development are based on the

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estimated calls for service per unit per year for that type of development in the City’s service area. Thus, the fee charged to a development project reflects the impact of that project on the overall need for facilities, apparatus and vehicles used by the Grass Valley Fire Department to serve development in the City.

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Chapter 5. Police Facilities
This chapter calculates impact fees for facilities and vehicles needed to provide police services to new development in Grass Valley.

Service Area
The service area for impact fees calculated in this chapter is the City of Grass Valley. Impact fees calculated in this chapter are intended to apply to all future development in the City, including portions of the Sphere of Influence (SOI) annexed in the future.

Demand Variable
A “demand variable” is a quantifiable attribute of development that is used in fee calculation formulas to represent the impact of development on a certain type of capital facilities. The demand variable used to calculate impact fees for police facilities, vehicles and equipment in this report is Police Department calls for service per year.

As part of this study, NBS analyzed a random sample of 650 of almost 27,000 calls for service received by the Grass Valley Police Department from calendar year 2019. We did not use 2020 data because we have found that the Covid pandemic skewed demand for law enforcement services during that year. Because the small number of calls for service generated by industrial development may not have been represented adequately in the random sample, additional analysis was done for industrial development using all 2019 calls for service.

Analysis of the random sample was used to establish the number of calls for service per year originating from the various types of development defined in this study and allowed us to determine the average number of calls per unit per year generated by each type of development.

Table 2.1 in Chapter 2 shows the calls-per-unit-per-year factors derived from that analysis. Those factors are used to calculate impact fees per unit later in this chapter.

It is important to note that calls-per-unit rates for residential development could not be established for the unit size categories used in this study. Those calls were categorized by type of unit (e.g., single-family, multi-family or mobile home). The Police calls-per-unit factors shown in Table 2.1 and used in this analysis apply the multi-family rates to the two smaller unit-size categories and the single-family rate to the two larger unit-size categories.

Methodology
This chapter calculates impact fees using the standard-based method discussed in Chapter

1. Standard-based fees are calculated using a specified relationship or standard that determines the number of service units to be provided for each unit of development. The level of service used in this analysis is discussed in the next section.

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Level of Service
In this case, the standard used to calculate impact fees is the existing level of service, defined as the replacement cost of existing Police Department facilities, vehicles and equipment divided by the total calls for service for the one-year 2019 period to get an average cost per call.

In 2021, AB 602 added Section 66016.5 to the Mitigation Fee Act. Among other things, after January 1, 2022, that section requires that if the level of service used in an impact fee study exceeds the existing level of service, the higher level of service must be justified. Using the existing level of service as the basis for the impact fees calculated in this chapter is consistent with the requirements of AB 602.

Facilities, Vehicles and Equipment
Table 5.1 lists the estimated replacement cost of the City’s existing Police Department facilities.

Animal control facilities are addressed separately in Chapter 6.

Table 5.2 lists the City’s existing Police vehicles and equipment including community and facility cameras. Costs for vehicles and equipment reflect the estimated current dollar replacement costs as provided by City staff. The police department maintains facility security cameras (interior and exterior) of all City buildings as well as community camera platforms. The purpose of facility cameras is to provide security for city facilities and to provide forensic evidence of crimes. The community cameras are primarily designed for crime prevention, detection, and/or resource deployment. Community cameras are primarily focused on areas of high traffic such as the downtown core, parks, and retail locations. The Police Department’s experience is that community cameras have proven highly useful in crime detection and investigations.

Table 5.1: Existing Police Department Facilities
Constr Building Bldg Repl Site Est Land FF&E Repl Impact Fee Facility Date Sq Ft 1
Cost 2 Acres 3Value 4Cost 5Cost Basis 6
Police Station 1996 9,000 5,175,000 $ 0.85 $391,000 $240,877 5,806,877 $ Police Range Storage (2) 1985 600 161,219 $ 64,232 $ 225,451 $ Police Range Covers (2) 1985 800 318,214 $ $ 318,214 0 $ Total $ 6,350,542
1 Existing buildings square feet from the City's insured property schedule 2 Building replacement cost based on recent construction costs 3 Site acreage provided by the Grass Valley Police Department 4 Land value based on $460,000 per acre
5 Replacement cost of furniture, fixtures and equipment (FF&E) from the City's insured property schedule 6 Impact fee cost basis = the sum of building replacement cost, estimated land value and the replacement cost of furniture, fixtures and equipment

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Table 5.3 summarizes the costs from the preceding tables and adds the current cash balance in the City’s Police Impact Fee Fund.

Cost per Call for Service
Table 5.4 calculates the cost per call for service for Police Department facilities, vehicles and equipment using the total cost basis from Table 5.3 and the existing number of calls for service per year.

Table 5.2: Existing Police Department Vehicles and Equipment Unit Unit Total
Description Count Cost 1
Cost 2
Marked Patrol Vehicles 8 63,235 $ 505,880 $
K9 Patrol Vehicles 3 69,235 $ 207,705 $
Unmarked Investigations/Admin Vehicles 9 58,235 $ 524,115 $ Special Duty Vehicles 4 58,235 $ 232,940 $
Sworn Officer Personal Equipment 3
34 16,489 $ 560,626 $
Community and Facility Cameras 185 Lump Sum 457,500 $
Total $2,488,766
1 Patrol vehicles are 2021-2022 Chevy Tahoes with an estimated base cost of $44,000 plus additional equipment cost
2 Total cost = unit count X unit cost
3 Includes uniforms, badge, radio, body camera, firearm and other equipment required for each sworn officer
Table 5.3: Total Impact Fee Cost Basis
Total
Component Cost Basis 1
Existing Buildings 6,350,542 $
Existing Vehicles and Equipment 2,488,766 $
Police Impact Fee Fund Balance 35,084 $
Total Cost 8,874,392 $
1 See Tables 5.1, and 5.2; DIF fund balance as of 6/30/22

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Impact Fees per Unit
Table 5.5 shows the calculation of impact fees for Police Department facilities per unit of development, by development type. Those fees are calculated using the average cost per call for service from Table 5.4 and the calls-per-unit-per-year factors from Table 2.1.

Table 5.4: Cost per Call for Service
Total Existing Calls Cost per Call
Cost Basis1for Service 2for Service 3
$8,874,392 26,338 $336.94
1 Total cost basis; see Table 5.3
2 Existing Police calls for service per year ; see Table 2.2 3 Cost per call for service = total cost basis / existing calls for service per year
Table 5.5 Impact Fee per Unit
Development Cost per CFS Impact Fee
Type Units 1
CFS 2per Unit 3per Unit 4
Residential: <800 Sq. Ft. DU $336.94 1.200 404.33 $
Residential: 800-1,200 Sq. Ft. DU $336.94 1.500 505.41 $ Residential: >1,200-2,100 Sq. Ft. DU $336.94 1.800 606 $ .49 Residential: >2,100 Sq. Ft. DU $336.94 2.000 $ 673.88
Commercial KSF $336.94 4.214 $ 1,419.94
Hotel/Lodging Room $336.94 1.380 $ 465.13
Office KSF $336.94 0.652 $ 219.69
Medical Office KSF $336.94 4.193 $ 1,412.88
Hospital Facilities Bed $336.94 4.496 $ 1,514.74
Light Industrial KSF $336.94 0.358 $ 120.72
Manufacturing KSF $336.94 0.178 $ 59.87
Warehouse KSF $336.94 0.310 $ 104.45
Public Facilities KSF $336.94 11.686 $ 3,937.46
K-12 Public Schools Students $336.94 0.058 $ 19.69
College/University Students $336.94 0.009 $ 3.08
1 DU = dwelling unit; KSF = 1,000 gross square feet of building area; Room = guest room or suite; Bed = patient bed
2 Cost per call for service per year; see Table 5.4
3 Calls for service per unit per year; see Table 2.1
4 Impact fee per unit = cost per call for service X calls for service per unit

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Projected Revenue
In Table 5.6, potential revenue from the police facilities impact fees can be estimated by applying the cost per call for service from Table 5.4 to the added calls for service to 2040 shown in Table

2.3 in Chapter 2. This projection assumes that future development occurs as shown in Chapter 2.

Although Table 5.5 calculates impact fees for K-12 Schools and Public Facilities, the City either may not have authority, or would be unlikely to charge impact fees to itself or other government agencies. Consequently, no projected revenue is shown for K-12 Schools or Public Facilities in Table 5.6. Revenue from those fees would amount to only about 0.5% of the total revenue projected in Table 5.6.

Updating the Fees
The impact fees calculated in this chapter are based the current estimated replacement costs for Police Department facilities, vehicles and equipment as shown in this chapter. We recommend that the fees be reviewed and adjusted annually using local cost data or an index such as the Engineering News Record Building Cost Index (BCI). See the Implementation Chapter for more on indexing of fees.

Table 5.6 Projected Revenue
Development Cost Added Projected
Type Units 1
per CFS 2CFS 3Revenue 4
All residential DU $336.94 3,963 $ 1,335,211
Commercial KSF $336.94 111 37,486 $
Hotel/Lodging Room $336.94 0 0 $
Office KSF $336.94 28 9,358 $
Medical Office KSF $336.94 0 0 $
Hospital Facilities Bed $336.94 0 0 $
Light Industrial KSF $336.94 3 910 $
Manufacturing KSF $336.94 6 1,937 $
Warehouse KSF $336.94 0 115 $
College/University Students $336.94 0 161 $
Total $ 1,385,178
1 DU = dwelling unit; KSF = 1,000 gross square feet of building area; Room = guest room or suite; Bed = patient bed
2 Cost per call for service per year; see Table 5.4
3 Added calls for service per year to 2040; see Table 2.3 4 Projected revenue = cost per call for service per year X added calls for service to 2040

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Nexus Summary
As discussed in Chapter 1 of this report, Section 66001 of the Mitigation Fee Act requires an agency establishing, increasing or imposing impact fees to make findings to:

Identify the purpose of the fee;
Identify the use of the fee; and,
Determine that there is a reasonable relationship between:
a. The use of the fee and the development type on which it is imposed; b. The need for the facility and the type of development on which the fee is imposed; and
c. The amount of the fee and the facility cost attributable to the development project.

Satisfying those requirements also ensures that the fees meet the “rational nexus” and “rough proportionality” standards enunciated in leading court decisions bearing on impact fees and other exactions. (For more detail, see “Legal Framework for Impact Fees” in Chapter 1.) The following paragraphs explain how the impact fees calculated in this chapter satisfy those requirements.

Purpose of the Fee: The purpose of the impact fees calculated in this chapter is to mitigate the impact of new development on the need for Police Department facilities, vehicles and equipment provided by the City of Grass Valley.

Use of the Fee. Impact fees calculated in this chapter will be used to provide additional Police Department facilities, vehicles and equipment to mitigate the impact of new development on the need for police services in the City. As provided by the Mitigation Fee Act, revenue from impact fees may also be used for temporary loans from one impact fee fund or account to another.

Reasonable Relationship between the Use of the Fee and the Development Type on Which It Is Imposed. The impact fees calculated in this chapter will be used to provide additional Police Department facilities and vehicles needed to serve the added demand for police services associated with new development in Grass Valley.

Reasonable Relationship between the Need for the Facilities and the Type of Development on Which the Fee Is Imposed. New development increases the demand for services provided by the Grass Valley Police Department. Without additional facilities, vehicles and equipment the increase in demand associated with new development would negatively impact the ability of the Grass Valley Police Department to provide services efficiently and effectively and to maintain the existing level of service for all development in the City.

Reasonable Relationship between the Amount of the Fee and the Facility Cost Attributable to the Development Project. The amount of the police facilities impact fees charged to a development project will depend on the increase in calls for service associated with that project.

The fees per unit of development calculated in this chapter for each type of development are

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based on the estimated calls for service per unit per year for that type of development. Thus, the fee charged to a development project reflects the impact of that project on the need for facilities, vehicles and to serve additional development in the City.

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Chapter 6. General Government Facilities
This chapter calculates impact fees for facilities and vehicles needed to provide general government services to new development in Grass Valley. The impact fees calculated in this chapter are based on the cost of the City’s existing general government facilities and vehicles.

This chapter also calculates a separate impact fee for the City’s animal control facilities and vehicles. Where the term “facilities” is used alone in this chapter, it is intended to include facilities, vehicles and related capital assets.

Service Area
The service area for impact fees calculated in this chapter is the City of Grass Valley. Impact fees calculated in this chapter are intended to apply to all future development in the City, including portions of the Sphere of Influence (SOI) annexed in the future.

Demand Variable
A “demand variable” is a quantifiable attribute of development that is used in fee calculation formulas to represent the impact of development on a certain type of capital facilities. The demand variable used to calculate impact fees for general government facilities and vehicles in this report is service population, which is a weighted composite variable made up of population and employees of business in the City. See Chapter 2 for a detailed discussion of service population. The demand variable used to calculate impact fees for animal control facilities is population.

Different demand variables are used for the two types of facilities addressed in this chapter because the need for general government facilities is impacted by both residential and nonresidential development, while the need for animal control facilities is impacted almost entirely by residential development.

Methodology
This chapter calculates impact fees using the standard-based method discussed in Chapter

1. Standard-based fees are calculated using a specified relationship or standard that determines the number of service units to be provided for each unit of development. The level of service used in this analysis is discussed in the next section.

Level of Service
In this case, the standard used to calculate impact fees is the existing level of service, defined as the replacement cost of existing general government facilities and vehicles divided by the existing service population, or in the case of animal control, by the existing population of the City.

In 2021, AB 602 added Section 66016.5 to the Mitigation Fee Act. Among other things, after January 1, 2022, that section requires that if the level of service used in an impact fee study

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exceeds the existing level of service, the higher level of service must be justified. Using the existing level of service as the basis for the impact fees calculated in this chapter is consistent with the requirements of AB 602.

Facilities, Vehicles and Equipment
Table 6.1 lists the estimated replacement cost of the City’s existing general government and animal control facilities.

Table 6.2 lists the City’s existing general government and animal control vehicles. Costs for vehicles reflect the estimated current dollar replacement costs as provided by City staff.

Table 6.1: Existing General Government and Animal Control Facilities Constr Building Bldg Repl Site Est Land FF&E Repl Impact Fee Facility Date Sq Ft 1
Cost 2 Acres 3Value 4Cost 5Cost Basis 6
City Hall 1980 17,310 3,728,000 $ 1.01 $464,600 $2,161,704 6,354,304 $ Corporation Yard
Shop/Office 1970 2,800 335,065 481,748 $ 816,813 $
Equipment Storage Bldg 1975 2,040 126,837 242,138 $ 368,975 $ Equipment Storage Bldg 1970 3,400 133,377 240,877 $ 374,254 $ Equipment Storage Bldg 1980 2,100 67,332 160,581 $ 227,913 $ Paint Shop/Storage 1975 800 206,257 160,581 $ 366,838 $ Storage Building 1990 500 35,566 32,116 $ 67,682 $
Subtotal $ 8,576,779
Animal Control Building 1975 2,345 302,157 $ 533,712 $ 835,869 $ Total $ 9,412,648
1 Existing buildings square feet from the City's insured property schedule 2 Building replacement cost from the City's insured property schedule 3 Site acreage estimated by NBS
4 City Hall land value based on $460,000 per acre
5 Replacement cost of furniture, fixtures and equipment (FF&E) based on personal property figure from the City's insured property schedule

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Table 6.3 summarizes the costs from the preceding tables and adds the current cash balance in the City’s Admin/General Facilities Impact Fee Fund.

Table 6.2: Existing General Government and Animal Control Vehicles Model Replacement
Department Year Make Model Description Cost 1
Fleet 2020 Ram 5500 4X4, Crane, Compressor, Welder 85,00 $ 0 Pool 2009 Ford Escape Hybrid, 4X4 38,536 $
Pool 2009 Ford Escape Hybrid, 4X4 38,536 $
Pool 2020 Toyota Rav4 Hybrid, 4X4 38,536 $
Streets 2021 Ford F-250 XL 4X4 Gas 46,355 $
Streets 2021 Ford F-250 XL 4X4 Gas 46,355 $
Streets 2003 Ford F-250 XL 4X4 Gas 42,220 $
Streets 2011 Bobcat S650 Skid Steer 65,000 $
Streets 2012 Ford F-350 XL, 4X4, Gas 46,355 $
Streets 2012 Ford F-550 XL, 4X4, Diesel, Dump, Plow 46,3 $ 55 Streets 2017 Ford F-350 XL, 4X4, Plow 46,355 $
Streets 2017 Ford F-250 XL, 4X4, Plow 46,355 $
Streets 2017 Ford F-250 XL, 4X4, Plow 46,355 $
Streets 2018 Freightliner Street Sweeper 220,000 $
Streets 2020 John Deere 410L 4X4, 145,000 $
Facilities 2021 Ram 2500 4X4, Liftgate 39,500 $
Streets 2021 International CV515 4X4, Dump, Plow 65,000 $ Streets 2021 International CV515 4X4, Dump, Plow 65,000 $ Subtotal General Government $ 1,166,813
Animal Control 2002 Ford Ranger 4X4 Gas 25,980 $
Animal Control 2016 Chevy 2500 4X4, Animal Control Body 37,500 $ Subtotal Animal Control $ 63,480
Total $ 1,230,293
1 Replacement cost provided by the City of Grass Valley City Engineer

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Cost per Capita
General Government. Table 6.4 calculates the cost per capita for general government facilities and vehicles using the general government facilities cost basis from Table 6.3 and the City’s existing service population from Table 2.2.

Animal Control. Table 6.5 calculates the cost per capita for animal control facilities and vehicles using the animal control facilities cost basis from Table 6.3 and the City’s existing population from Table 2.2.

Table 6.3: Impact Fee Cost Basis
Impact Fee
Component Cost Basis 1
Existing General Government Buildings 8,576,779 $
Existing General Government Vehicles 1,166,813 $
Admin/General Facilities Impact Fee Fund Balance 2
$ 79,005
Subtotal General Government 9,822,597 $
Existing Animal Control Facilities 835,869 $
Existing Animal Control Vehicles. 63,480 $
Subtotal Animal Control 899,349 $
1 See Tables 6.1, and 6.2
2 Impact fee fund balance as of 6/30/22
Table 6.4: Cost per Capita - General Government Facilities General Gov't Existing Service Cost per
Cost Basis1Population 2Capita 3
$9,822,597 20,233 $485.47
1 General government cost basis; see Table 6.3
2 Existing service population ; see Table 2.2
3 Cost per capita of service population = total cost basis / existing service population
Table 6.5: Cost per Capita - Animal Control Facilities
Animal Control Existing Cost per
Cost Basis1Population 2Capita 3
$899,349 13,617 $66.05
1 Animal control cost basis; see Table 6.3
2 Existing population ; see Table 2.2
3 Cost per capita = cost basis / existing population

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Impact Fees per Unit
General Government. Table 6.6 shows the calculation of impact fees for per unit of development, by development type, for general government facilities and vehicles. Those fees are calculated using the cost per capita of service population from Table 6.4 and the service population per unit from Table 2.1.

Animal Control. Table 6.7 shows the calculation of impact fees for per unit of development, by development type, for animal control facilities and vehicles. Those fees are calculated using the cost per capita from Table 6.5 and the population per unit from Table 2.1. Those impact fees apply only to residential development.

Table 6.6 Impact Fees per Unit - General Government Facilities Development Cost per Svc Pop Impact Fee
Type Units 1
Capita 2per Unit 3per Unit 4
Residential: <800 Sq. Ft. DU $485.47 1.900 922.40 $
Residential: 800-1,200 Sq. Ft. DU $485.47 2.000 970.95 $ Residential: >1,200-2,100 Sq. Ft. DU $485.47 2.100 1,0 $ 19.50 Residential: >2,100 Sq. Ft. DU $485.47 2.200 1,068.04 $ Commercial KSF $485.47 1.090 529.17 $
Hotel/Lodging Room $485.47 0.250 121.37 $
Office KSF $485.47 0.970 470.91 $
Medical Office KSF $485.47 0.930 451.49 $
Hospital Facilities Bed $485.47 7.240 3,514.83 $
Light Industrial KSF $485.47 0.430 208.75 $
Manufacturing KSF $485.47 0.620 300.99 $
Warehouse KSF $485.47 0.190 92.24 $
Public Facilities KSF $485.47 0.970 470.91 $
K-12 Public Schools Students $485.47 0.000 0.00 $
College/University Students $485.47 0.100 48.55 $
1 DU = dwelling unit; KSF = 1,000 gross square feet of building area; Room = guest room or suite; Bed = patient bed
2 Cost per capita of service population; see Table 6.4
3 Service population per unit; see Table 2.1
4 Impact fee per unit = cost per capita X service population per unit

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Projected Revenue
General Government. In Table 6.8, potential revenue from the general government facilities impact fees can be estimated by applying the cost per capita of service population from Table 6.4 to the added service population to 2040 shown in Table 2.3. This projection assumes that future development occurs as shown in Chapter 2.

Table 6.7 Impact Fee per Unit - Animal Control Facilities Development Cost per Population Impact Fee
Type Units 1
Capita 2per Unit 3per Unit 4
Residential: <800 Sq. Ft. DU $66.05 1.900 $ 125.49
Residential: 800-1,200 Sq. Ft. DU $66.05 2.000 $ 132.09 Residential: >1,200-2,100 Sq. Ft. DU $66.05 2.100 $ 138.70 Residential: >2,100 Sq. Ft. DU $66.05 2.200 $ 145.30
1 DU = dwelling unit
2 Cost per capita; see Table 6.5
3 Population per unit; see Table 2.1
4 Impact fee per unit = cost per capita X population per unit Table 6.8 Projected Revenue - General Government Facilities Development Cost per Added Projected
Type Units 1
Capita 2Svc Pop 3Revenue 4
All residential DU $485.47 4,874 2,366,201 $
Commercial KSF $485.47 437 212,152 $
Hotel/Lodging Room $485.47 0 0 $
Office KSF $485.47 353 171,372 $
Medical Office KSF $485.47 0 0 $
Hospital Facilities Bed $485.47 0 0 $
Light Industrial KSF $485.47 35 16,992 $
Manufacturing KSF $485.47 46 22,332 $
Warehouse KSF $485.47 2 971 $
College/University Students $485.47 42 20,341 $
Total $ 2,810,361
1 DU = dwelling unit; KSF = 1,000 gross square feet of building area; Room = guest room or suite; Bed = patient bed
2 Cost per capita of service population; see Table 6.4
3 Added service population; see Table 2.3
4 Projected revenue = cost per capita X added service population

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Although Table 6.6 calculates impact fees for K-12 Schools and Public Facilities, the City either may not have authority or would be unlikely to charge impact fees to itself or other government agencies. Consequently, no projected revenue is shown for K-12 Schools or Public Facilities in Table 6.8. Revenue from those fees would amount to only about 0.3% of the total revenue projected in Table 6.8.

Animal Control. In Table 6.9, potential revenue from the animal control facilities impact fees can be estimated by applying the cost per capita from Table 6.5 to the added population to 2040 shown in Table 2.3. This projection assumes that future development occurs as shown in Chapter 2.

Updating the Fees
The impact fees calculated in this chapter are based the current estimated replacement costs for general government and animal control facilities and vehicles as shown in this chapter. We recommend that the fees be reviewed and adjusted annually using local cost data or an index such as the Engineering News Record Building Cost Index (BCI). See the Implementation Chapter for more on indexing of fees.

Nexus Summary
As discussed in Chapter 1 of this report, Section 66001 of the Mitigation Fee Act requires an agency establishing, increasing or imposing impact fees to make findings to:

Identify the purpose of the fee;
Identify the use of the fee; and,
Determine that there is a reasonable relationship between:
a. The use of the fee and the development type on which it is imposed; b. The need for the facility and the type of development on which the fee is imposed; and
Table 6.9 Projected Revenue - Animal Control Facilities and Vehicles Development Cost per Added Projected
Type Units 1
Capita 2Population 3Revenue 4
All residential DU $66.05 4,874 $ 321,908
1 DU = dwelling unit
2 Cost per capita; see Table 6.5
3 Added population; see Table 2.3
4 Projected revenue = cost per capita X added population

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c. The amount of the fee and the facility cost attributable to the development project.

Satisfying those requirements also ensures that the fees meet the “rational nexus” and “rough proportionality” standards enunciated in leading court decisions bearing on impact fees and other exactions. (For more detail, see “Legal Framework for Impact Fees” in Chapter 1.) The following paragraphs explain how the impact fees calculated in this chapter satisfy those requirements.

Purpose of the Fee: The purpose of the impact fees calculated in this chapter is to mitigate the impact of new development on the need for general government and animal control facilities and vehicles provided by the City of Grass Valley.

Use of the Fee. Impact fees calculated in this chapter will be used to provide additional general government and animal control facilities and vehicles to mitigate the impact of new development in the City. As provided by the Mitigation Fee Act, revenue from impact fees may also be used for temporary loans from one impact fee fund or account to another.

Reasonable Relationship between the Use of the Fee and the Development Type on Which It Is Imposed. The impact fees calculated in this chapter will be used to provide additional general government and animal control facilities and vehicles to serve the added demand created by new development in Grass Valley.

Reasonable Relationship between the Need for the Facilities and the Type of Development on Which the Fee Is Imposed. New development increases the demand for general government and animal control services provided by the City of Grass Valley. Without additional facilities and, the increase in demand associated with new development would negatively impact the ability of the City to maintain the existing level of service as the City grows.

Reasonable Relationship between the Amount of the Fee and the Facility Cost Attributable to the Development Project. The amount of the general government and animal control facilities impact fees charged to a development project will depend on the increase in service population or resident population respectively. The fees per unit of development calculated in this chapter for each type of development are based on the estimated increase in service population or resident population associated with that type of development in the City’s service area. Thus, the fee charged to a development project reflects the impact of that project on the need for facilities and vehicles needed to maintain the existing level of service as the City grows.

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Chapter 7. Storm Drainage Improvements
This chapter calculates impact fees for improvements to Grass Valley’s storm drainage system.

The impact fees calculated in this chapter are based on the City’s March 1986 Storm Drainage Master Plan and Criteria (Master Plan), prepared by Cramer Engineering, with updates to planned improvements and improvement costs as of 2022, provided by the City Engineer.

Service Area
The service area for impact fees calculated in this chapter is the area covered by the drainage master plan.

Methodology
The method used to calculate impact fees in this chapter is the plan-based method discussed in Chapter 1. That method calculates impact fees by allocating the cost of specific facilities to the development served by those facilities. The City has a system of existing storm drainage facilities, and the planned improvements provided by the City Engineer are needed to correct some existing deficiencies and to accommodate future development. Therefore, the cost of planned drainage system improvements will be allocated to both existing and future development so that impact fees paid by future development are not used to pay for correcting deficiencies in the City’s existing stormwater drainage system.

Level of Service
The level of service for storm drainage facilities used as a basis for the impact fees calculated in this chapter is explained in the Master Plan. Because the master planned level of service has been in effect since 1986, it represents the existing level of service.

In 2021, AB 602 added Section 66016.5 to the Mitigation Fee Act. Among other things, after January 1, 2022, that section requires that if the level of service used in an impact fee study exceeds the existing level of service, the higher level of service must be justified. Using the existing level of service as the basis for the impact fees calculated in this chapter is consistent with the requirements of AB 602.

Demand Variable
A demand variable is some measurable attribute of development that is used in impact fee calculation formulas to represent the impacts created by different types of development. The demand variable used in this chapter to calculate drainage impact fees is acres of impervious surface area (ISA). Impervious surface area refers to the portion of a development site occupied by hard surfaces, such as roofs and paving that prevent absorption of stormwater by the soil and thereby increase runoff into drainage facilities.

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Drainage System Improvements
The City Engineer and Grass Valley’s Capital Improvement Plan identify the following planned improvement projects that are necessary to accommodate future development. Some of these improvements also benefit existing users, so the cost of these improvements is allocated to both existing and future development in calculating impact fees.

Acres of Impervious Surface Area by Development Type
Table 7.2 identifies the number of acres projected for each development type at buildout as well as the ISA factor for each type of development. Those two factors are used to calculate total buildout ISA acres by development type.

Table 7.1: Drainage System Improvements
Facility Facility Improvement
Number Location Cost 1
SD-L-6 E. Main Street $ 719,113
SD-L-8 Centerville Flume $ 830,665
SD-L-9 Master Plan Updates 300,000 $
SD-L-10 Freeman Lane $ 0
SD-L-11 Slide Ravine Drain $ 886,345
SD-L-13 Park Avenue to Ocean Avenue 981,578 $
SD-L-23 Washington-Bennett Drain 0 $
SD-R-1 Colfax Avenue Drain 4,461,488 $
SD-R-2 Woodpecker Ravine 1,207,523 $
SD-R-3 Matson Creek Phase 1 2,264,054 $
SD-R-4 Wolf Creek Improvements 0 $
SD-R-5 S. Auburn Street Drainage 1,390,761 $
SD-R-6 Matson Creek Phase 2 2,147,851 $
SD-R-7 Matson Creek Lateral 244,611 $
Drainage Master Plan Update 100,000 $
Total $ 15,533,989
1 Estimated 2022 costs provided by the Grass Valley Public Works Department; see Appendix A for project details and cost breakdown

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Cost per Acre of Impervious Surface Area
Based on data from Tables 7.1 and 7.2, Table 7.3 calculates the average cost of drainage system improvements per acre of impervious surface area.

Table 7.2: Impervious Surface Area - All Development at Buildout Development Buildout Net ISA Buildout %
Type Dev Acres 1
Factor 2ISA Acres 3
ISA
Residential: <1,200 Sq. Ft. 2,734.4 0.60 1,640.6 45.5%
Residential: >1,200 Sq. Ft. 319.7 0.40 127.9 3.5%
Commercial 1,290.5 0.80 1,032.4 28.6%
Hotel/Lodging
Office
Medical Office
Hospital Facilities
Manufacturing/Industrial 625.0 0.80 500.0 13.9%
Light industrial
Manufacturing
Warehouse
Public/Quasi-Public 680.2 0.44 299.3 8.3%
K-12 Public Schools
College/University
Parks & Open Space 259.9 0.03 7.8 0.2%
Total Impervious Surface Area 5,909.7 3,608.0 100.0%
1 Net developed acres at buildout; Source: City of Grass Valley General Plan; excludes 10% of gross acreage to account for public infrastructure such as road right-of-way 2 Factors estimated using the "User's Guide for the CA Impervious Surface Coefficients," Ecotoxicology Program, Intergrated Risk Assessment Branch, California Office of Environmental Health Hazard Assessment
3 Buildout ISA acres = buildout net developed acres x ISA factor Table 7.3: Cost per Acre of ISA
Total Buildout Cost per
Improvement Cost1ISA Acres 2Acre of ISA 3
$15,533,989 3,608.0 $4,305.42
1 See Table 7.1
2 See Table 7.2
3 Cost Acre of impervious surface area (ISA) = total improvement cost / buildout ISA acres

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Impact Fees Per Unit
Table 7.4 calculates the impact fee per developed acre by development type by multiplying the cost per acre from Table 7.3 by the ISA Factor for each development type in Table 7.2. The drainage impact fees in Table 7.4 are calculated for fairly broad categories of development. The development types that fall under each broad category are shown in italics.

Projected Revenue
This chapter does not project revenue from storm drainage impact fees because a current estimate of the remaining undeveloped acres for each development type is not available.

Updating the Fees
The impact fees calculated in this chapter are based on cost estimates updated to 2022. We recommend that these fees be reviewed periodically and adjusted if necessary to reflect changes in costs. An index such as the Engineering News Record Construction Cost Index can be used for that purpose.

Table 7.4: Impact Fee per Developed Acre by Development Type Development Cost per ISA Impact Fee per
Type Acre of ISA 1
Factor 2Net Dev Acre 3
Residential: <1,200 Sq. Ft. 4,305.42 $ 0.60 2,583.25 $
Residential: >1,200 Sq. Ft. 4,305.42 $ 0.40 1,722.17 $
Commercial/Office $ 0.80 4,305.42 3,444.34 $
Hotel/Lodging
Office
Medical Office
Hospital Facilities
Industrial $ 0.80 4,305.42 3,444.34 $
Light industrial
Manufacturing
Warehouse
Public/Quasi-Public $ 0.44 4,305.42 1,894.39 $
K-12 Public Schools
College/University
1 See Table 7.3
2 See Table 7.2
3 Impact fee per net developed acre = cost per acre of impervious surface area (ISA) X ISA factor

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Nexus Summary
As discussed in Chapter 1 of this report, Section 66001 of the Mitigation Fee Act requires that an agency establishing, increasing or imposing impact fees, must make findings to:

Identify the purpose of the fee;
Identify the use of the fee; and,
Determine that there is a reasonable relationship between:
a. The use of the fee and the development type on which it is imposed; b. The need for the facility and the type of development on which the fee is imposed; and
c. The amount of the fee and the facility cost attributable to the development project.

Satisfying those requirements also ensures that the fees meet the “rational nexus” and “rough proportionality” standards enunciated in leading court decisions bearing on impact fees and other exactions. (For more detail, see “Legal Framework for Impact Fees” in Chapter 1.) The following paragraphs explain how the impact fees calculated in this chapter satisfy those requirements.

Purpose of the Fee: The purpose of the impact fees calculated in this chapter is to pay for new development’s proportionate share of the cost of providing drainage system improvements to serve new development in Grass Valley.

Use of the Fee. Impact fees calculated in this chapter will be used to pay for future drainage system improvements needed to serve future development in Grass Valley. As provided by the Mitigation Fee Act, revenue from impact fees may also be used for temporary loans from one impact fee fund or account to another.

Reasonable Relationship between the Use of the Fee and the Development Type on Which It Is Imposed. The impact fees calculated in this chapter will be used to pay for the cost of drainage system improvements needed to serve new development in Grass Valley.

Reasonable Relationship between the Need for the Facilities and the Type of Development on Which the Fee Is Imposed. All development generates storm water runoff in proportion to the amount of impervious surface area added by development. The impact fees calculated in this chapter will pay for drainage system improvements needed to serve new development in Grass Valley as projected in Chapter 2 of this report.

Reasonable Relationship between the Amount of the Fee and the Facility Cost Attributable to the Development Project. The amount of the storm drainage impact fees charged to a development project is related to the amount of impervious cover associated with that project.

The fees per unit of development calculated in this chapter for each type of development are based on the engineer’s estimates of the amount of storm water runoff per acre associated with that type of development.

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Chapter 8. Administrative Fee
This chapter provides a cost-of-service analysis to substantiate an administrative fee that is added to each impact fee (see Executive Summary). This charge recovers the cost of accounting, reporting and other administrative activities required by the Mitigation Fee Act, as well as the cost of periodic updates to the impact fee study.

The following table establishes an Administration Fee for the impact fee program.

The table above includes the allocated costs of program administration as established by estimated annual costs required, and the annualized costs of completing a comprehensive impact fee analysis every five years. The projected and annualized revenue assumptions were developed throughout the various chapters included in the body of this report. Two percent of the impact fee amount is a widely implemented administrative fee in California for impact fee programs.

Comparatively, the fee calculated above for the City of Grass Valley’s program is well within the range of similar fees charged for other California local government agencies.

Administrative Costs of the Impact Fee Program
Projected Impact Fee Revenue (2023 - 2040) 29,521,58 $ [1] 5 Average Annual Revenue 1,640,088 $ [2]
Average Annual Cost of Impact Fee Update Studies 10, $ [3] 000 Administrative Cost as % of Impact Fee Revenue 0.61% [4] Notes:
[1] Projected impact fee revenue collected from 2023 through 2040 [2] Average annual revenue = total projected revenue / 18 years [3] Estimated annual cost of impact fee update study every five years [4] Administrative cost as % of impact fee revenue = average annual revenue / average annual cost of impact fee study updates

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Chapter 9. Implementation
This chapter of the report contains recommendations for adoption and administration of impact fees, and for the interpretation and application of the development impact fees and in-lieu fees calculated in this study. It was not prepared by an attorney and is not intended as legal advice.

Statutory requirements for the adoption and administration of fees imposed as a condition of development approval (impact fees) are found in the Mitigation Fee Act (Government Code Sections 66000 et seq.).

Adoption
The form in which development impact fees are enacted should be determined by the City attorney. The specific requirements are different for impact fees under the Mitigation Fee Act, and for park land dedication and in-lieu fees under the Quimby Act. The latter requirements must be adopted by ordinance and are subject to the same noticing and public hearing procedures as any ordinance.

Procedures for adoption of fees subject to the Mitigation Fee Act, including notice and publichearing requirements, are specified in Government Code Sections 66016 and 66018. It should be noted that Section 66018 refers to Government Code Section 6062a, which requires that the public hearing notice be published at least twice during the 10-day notice period. However, Section 66016.5 added by AB 602 in 2021 requires that impact fee nexus studies be adopted at a public hearing with at least 30-days’ notice.

Government Code Section 66017 provides that fees subject to the Mitigation Fee Act do not become effective until 60 days after final action by the governing body.

Actions establishing or increasing fees subject to the Mitigation Act require certain findings, as set forth in Government Code Section 66001 and discussed in Chapter 1 of this report.

Examples of findings that could be used for impact fees calculated in this study are shown below.

The specific language of such findings should be provided by the City Attorney. A more complete discussion of the nexus for each fee can be found in individual chapters of this report.

Sample Finding: Purpose of the Fee. The City Council finds that the purpose of the impact fees hereby enacted is to protect the public health, safety and welfare by requiring new development to contribute to the cost of public facilities needed to mitigate the impacts of new development.

Sample Finding: Use of the Fee. The City Council finds that revenue from the impact fees hereby enacted will be used to provide public facilities needed to mitigate the impacts of

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new development in the City and identified in the 2022 City of Grass Valley Development Impact Fee Study by NBS. 2
Sample Finding: Reasonable Relationship: Based on analysis presented in the 2022 City of Grass Valley Development Impact Fee Study by NBS, the City Council finds that there is a reasonable relationship between:
a. The use of the fees and the types of development projects on which they are imposed; and,
b. The need for facilities and the types of development projects on which the fees are imposed.

Administration
The California Mitigation Fee Act (Government Code Sections 66000 et seq.) mandates procedures for administration of impact fee programs, including collection and accounting, reporting, and refunds. References to code sections in the following paragraphs pertain to the California Government Code.

Notices and Statute of Limitations. Section 66006 (f) provides that a local agency, at the time it imposes a fee for public improvements on a specific development project, "... shall identify the public improvement that the fee will be used to finance." The required notification could refer to the improvements identified in this study or to a capital improvement plan.

Section 66020 (d) (1) requires that the agency, at the time it imposes an impact fee, provide a written statement of the amount of the fee and written notice of a 90-day period during which the imposition of the fee can be protested. Failure to protest imposition of the fee during that period may deprive the fee payer of the right to subsequent legal challenge.

Section 66022 (a) provides a separate procedure for challenging the establishment of an impact fee. Such challenges must be filed within 120 days of enactment.

Collection of Fees. Section 66007(a) provides that a local agency shall not require payment of fees by developers of residential projects prior to the date of final inspection, or issuance of a certificate of occupancy, whichever occurs first.

However, "utility service fees" (not defined, but likely referring to water and sewer connections) may be collected upon application for utility service. In a residential development project of more than one dwelling unit, Section 66007 (a) allows the agency to choose to collect fees either for 2 According to Gov’t Code Section 66001 (a) (2), the use of the fee may be specified in a capital improvement plan, the General Plan, or other public documents that identify the public facilities for which the fee is charged.

The findings recommended here identify this impact fee study as the source of that information. Also note that Section 66016.5 (a)(6) requires that large jurisdictions adopt a capital improvement plan as part of an impact fee nexus study. However, that requirement applies only in counties of 250,000 or more, so it does not apply to Grass Valley.

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individual units or for phases upon final inspection, or for the entire project upon final inspection of the first dwelling unit completed.

Section 66007 (b) provides two exceptions when the local agency may require the payment of fees from developers of residential projects at an earlier time: (1) when the local agency determines that the fees “will be collected for public improvements or facilities for which an account has been established and funds appropriated and for which the local agency has adopted a proposed construction schedule or plan prior to final inspection or issuance of the certificate of occupancy” or (2) the fees are “to reimburse the local agency for expenditures previously made.”
Statutory restrictions on the time at which fees may be collected do not apply to non-residential development.

Notwithstanding the foregoing restrictions, some cities collect impact fees for all facilities at the time building or grading permits are issued, and builders may find it convenient to pay the fees at that time.

In cases where the fees are not collected upon issuance of building permits, Sections 66007 (c) (1) and (2) provide that the City may require the property owner to execute a contract to pay the fee, and to record that contract as a lien against the property until the fees are paid.

Earmarking and Expenditure of Fee Revenue. Section 66006 (a) mandates that fees be deposited “with other fees for the improvement in a separate capital facilities account or fund in a manner to avoid any commingling of the fees with other revenues and funds of the local agency, except for temporary investments, and expend those fees solely for the purpose for which the fee was collected.” Section 66006 (a) also requires that interest earned on the fee revenues be placed in the capital account and used for the same purpose.

The language of the law is not clear as to whether depositing fees "with other fees for the improvement" refers to a specific capital improvement or a class of improvements (e.g., street improvements).

We are not aware of any municipality that has interpreted that language to mean that funds must be segregated by individual projects. And, as a practical matter, that approach would be unworkable because it would mean that no pay-as-you-go project could be constructed until all benefiting development had paid the fees. Common practice is to maintain separate funds or accounts for impact fee revenues by facility category (i.e., streets, park improvements), but not for individual projects.

Impact Fee Exemptions, Reductions, and Waivers. In the event that a development project is found to have no impact on facilities for which impact fees are charged, such project must be exempted from the fees.

If a project has characteristics that will make its impacts on a particular public facility or infrastructure system significantly and permanently smaller than the average impact used to calculate impact fees in this study, the fees should be reduced accordingly to meet the

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requirement that there must be a reasonable relationship between the amount of the fee and the cost of the public facility attributable to the development on which the fee is imposed. The fee reduction is required if the fee is not proportional to the impact of the development on relevant public facilities.

In some cases, an agency may desire to voluntarily waive or reduce impact fees that would otherwise apply to a project as a way of promoting goals such as affordable housing or economic development. Such a waiver or reduction is within the discretion of the governing body but may not result in increased costs to other development projects. So, the effect of such policies is that the lost revenue must be made up from sources other than impact fees.

Credit for Improvements Provided by Developers. If the City requires a developer, as a condition of project approval, to dedicate land or construct facilities or improvements for which impact fees are charged, the City should ensure that the impact fees are adjusted so that the overall contribution by the developer does not exceed the impact created by the development.

In the event that a developer voluntarily offers to dedicate land, or construct facilities or improvements in lieu of paying impact fees, the City may accept or reject such offers, and may negotiate the terms under which such an offer would be accepted. Excess contributions by a developer may be offset by reimbursement agreements.

Credit for Existing Development. If a project involves replacement, redevelopment or intensification of previously existing development, impact fees should be applied only to the portion of the project that represents a net increase in demand for relevant City facilities, applying the measure of demand used in this study to calculate that impact fee.

Annual Report. Section 66006 (b) (1) requires that once each year, within 180 days of the close of the fiscal year, the local agency must make available to the public the following information for each separate account established to receive impact fee revenues:

1. A brief description of the type of fee in the account or fund;

2. The amount of the fee;

3. The beginning and ending balance of the account or fund;

4. The amount of the fees collected and interest earned;

5. Identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the percentage of the cost of the public improvement that was funded with fees;

6. Identification of the approximate date by which the construction of a public improvement will commence, if the City determines sufficient funds have been collected to complete financing of an incomplete public improvement;

7. A description of each inter-fund transfer or loan made from the account or fund, including interest rates, repayment dates, and a description of the improvement on which the transfer or loan will be expended;

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8. The amount of any refunds or allocations made pursuant to Section 66001, paragraphs (e) and (f).

The annual report must be reviewed by the City Council at its next regularly scheduled public meeting, but not less than 15 days after the statements are made public, per Section 66006 (b) (2).

Five-Year Findings and Refunds under the Mitigation Fee Act. Prior to 1996, The Mitigation Fee Act required that a local agency collecting impact fees was required to expend or commit impact fee revenue within five years or make findings to justify a continued need for the money.

Otherwise, those funds had to be refunded. SB 1693, adopted in 1996 as an amendment to the Mitigation Fee Act, changed that requirement in material ways.

Now, Section 66001 (d) requires that, for the fifth fiscal year following the first deposit of any impact fee revenue into an account or fund as required by Section 66006 (b), and every five years thereafter, the local agency shall make all of the following findings for any fee revenue that remains unexpended, whether committed or uncommitted:

1. Identify the purpose to which the fee will be put;

2. Demonstrate the reasonable relationship between the fee and the purpose for which it is charged;

3. Identify all sources and amounts of funding anticipated to complete financing of incomplete improvements for which impact fees are to be used;

4. Designate the approximate dates on which the funding necessary to complete financing of those improvements will be deposited into the appropriate account or fund.

Those findings are to be made in conjunction with the annual reports discussed above. If such findings are not made as required by Section 66001, the local agency could be required to refund the moneys in the account or fund, per Section 66001 (d).

Once the agency determines that sufficient funds have been collected to complete financing on incomplete improvements for which impact fee revenue is to be used, it must, within 180 days of that determination, identify an approximate date by which construction of the public improvement will be commenced (Section 66001 (e)). If the agency fails to comply with that requirement, it must refund impact fee revenue in the account according to procedures specified in Section 66001 (d).

For a useful discussion of the foregoing requirements, see “The Mitigation Fee Act’s Five-Year Findings Requirement: Beware Costly Pitfalls” by Glen Hansen, Senior Counsel, Abbott and Kindermann, and Rick Jarvis, Managing Partner, Jarvis, Fay and Gibson, presented at the 2022 League of California Cities City Attorneys Spring Conference.

Indexing of In-Lieu/Impact Fees. In-lieu fees and impact fees calculated in this report are based on current costs and should be adjusted periodically to account for changes in the cost of facilities

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or other capital assets that will be funded by those fees. That adjustment is intended to account for escalation in costs for land, construction, vehicles and other relevant capital assets. The Engineering News Record Building Cost Index (BCI) and Construction Cost Index (CCI) are useful for indexing construction costs. Where land costs are covered by an impact fee or in-lieu fee, land costs should be adjusted based on changes in local land prices.

Requirements Imposed by AB 602
In 2021, the California Legislature passed AB 602 and the Governor signed it into law. AB 602 creates some new requirements for impact fees that will go into effect in 2022. The new law amends Government Code Section 65940.1 and adds Section 66016.5 to impose the following requirements:
1) A city, county or special district that has an internet website shall post on its website:
a) A current written schedule of fees, exactions and affordability requirements applicable to a proposed housing development project, and shall present that information in a manner that identifies the fees, exactions and affordability requirements that apply to each parcel and the fees that apply to each new water and sewer utility connection b) All zoning ordinances and development standards and specifying the zoning, design and development standards that apply to each parcel
c) A list of the information that will be required from any applicant for a development project, as specified in Government Code Section 69540
d) The current and five previous annual fee reports required by Government Code Section 66006 and Subsection 66013 (d).
e) An archive of impact fee nexus studies, cost of service studies or equivalent conducted on or after January 1, 2018.
2) The above information shall be updated within 30 days of any changes 3) A City or County shall request from a development proponent, upon issuance of a certificate of occupancy or final inspection, the total amount of fees and exactions associated with the project for which the certificate it issued. That information must be posted on the website and updated at least twice a year.
4) Before adoption of an impact fee, an impact fee nexus study shall be adopted. 5) When applicable, the nexus study shall identify the existing level of service for each public facility, identify the proposed new level of service and explain why the new level of service is appropriate
6) If a nexus study supports the increase of an existing fee, the local agency shall review the assumptions of the nexus study supporting the original fee and evaluate the amount of the fees collected under the original fee.

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7) A nexus study adopted after July 1, 2022, shall calculate a fee imposed on a housing development project proportionately to the square footage of the proposed units of the development. A local agency that imposes a fee proportionately to the square footage if the proposed units of the development shall be deemed to have used a valid method to establish a reasonable relationship between the fee charged and the burden posed by the development. A nexus study is not required to comply with this requirement if the agency makes certain findings outlined in the statute.
8) Large jurisdictions as defined in Section 53559.1 (d) of the Health and Safety Code (counties of 250,000 or more and cities in those counties) shall adopt a capital improvement plan as part of a nexus study.
9) All studies shall be adopted at a public hearing with at least 30-days’ notice, and the local agency shall notify any member of the public that requests notice of intent to begin an impact fee nexus study of the date of the hearing.
10) Studies shall be updated at least every eight years, beginning on January 1, 2022.

Training and Public Information
Effective administration of an impact fee program requires considerable preparation and training. It is important that those responsible for collecting the fees, and for explaining them to the public, understand both the details of the fee program and its supporting rationale.

It is also useful to pay close attention to handouts that provide information to the public regarding impact fees. Impact fees should be clearly distinguished from other fees, such as user fees for application processing, and the purpose and use of particular impact fees should be made clear.

Finally, anyone responsible for accounting, capital budgeting, or project management for projects involving impact fees must be fully aware of the restrictions placed on the expenditure of impact fee revenues. Fees must be expended for the purposes identified in the impact fee nexus study in which they were calculated, and the City must be able to show that funds have been properly expended.

Recovery of Administrative Costs
To recover the cost of periodic impact fee update studies and ongoing staff costs for capital budgeting, annual reports, five-year updates and other requirements of the Mitigation Fee Act, an administrative charge may be added to the impact fees calculated in this report. Chapter 8 of this report calculates the percentage that the impact fees should be increased to cover the cost of administering the City’s impact fee program. Table S.2 in the Executive Summary shows the impact fees calculated in this report with the administrative charge added.

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Prepared by NBS for the City of Grass Valley

APPENDIX A
Storm Drain Improvement Project Cost Detail

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Preliminary Cost Estimate Centerville Flume - Phase 4
Local Drainage Improvements
PROJECT DESCRIPTION:

Limits:

Proposed Improvement (Scope):

TOTAL DRAINAGE IMPROVEMENT ITEMS $381,915
ROCK EXCAVATION 50% $190,958
TOTAL PROJECT CONSTRUCTION COSTS $572,873
ENVIRONMENTAL MITIGATION 10% $57,287
ENGINEERING DESIGN COSTS 20% $114,575
CONSTRUCTION MANAGEMENT 15.0% $85,931
PROJECT CONSTRUCTION COSTS $572,873
TOTAL BASE PROJECT COSTS $830,665
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Along Slide Ravine from 180' south of Doris Drive to a point 235'+/- north of Doris Drive Replace the existing inadequate natural channel with a new 42" pipe (Approximately 415 LF of new pipe). COGV Storm Drainage Master Plan (1986) PN#14 (Nodes14 to 37)

SUMMARY OF BASE PROJECT COST ESTIMATE
SD-L-8 Page 223
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Preliminary Cost Estimate Colfax Avenue
Regional Drainage Improvements
PROJECT DESCRIPTION:

Limits:

Proposed Improvement (Scope):

TOTAL DRAINAGE IMPROVEMENT ITEMS $2,949,744
ROCK EXCAVATION 10% $294,974
TOTAL PROJECT CONSTRUCTION COSTS $3,244,718
ENVIRONMENTAL MITIGATION 10% $324,472
ENGINEERING DESIGN COSTS 15% $486,708
CONSTRUCTION MANAGEMENT 12.5% $405,590
PROJECT CONSTRUCTION COSTS $3,244,718
TOTAL BASE PROJECT COSTS $4,461,488
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Along Colfax Avenue from 300' east of Clark Street to Hwy 49 Frontage Replace the existing inadequate 74" pipe with a new 96" pipe or equivalent arch pipe (Approximately 880 LF of new pipe). COGV Storm Drainage Master Plan (1986) PN#2 (Nodes44 to 64)

SUMMARY OF BASE PROJECT COST ESTIMATE
SD-R-1 Page 224
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Preliminary Cost Estimate East Main Street
Local Drainage Improvements
PROJECT DESCRIPTION:

Limits:

Proposed Improvement (Scope):

TOTAL DRAINAGE IMPROVEMENT ITEMS $330,627
ROCK EXCAVATION 50% $165,313
TOTAL PROJECT CONSTRUCTION COSTS $495,940
ENVIRONMENTAL MITIGATION 10% $49,594
ENGINEERING DESIGN COSTS 20% $99,188
CONSTRUCTION MANAGEMENT 15.0% $74,391
PROJECT CONSTRUCTION COSTS $495,940
TOTAL BASE PROJECT COSTS $719,113
ESTIMATE PREPARED February 2022
BASE YEAR 2022
East Main Street from the IdahoMaryland Intersection to Scandling Ave.

Replace the existing undersized storm drain in E. Main Street with a new 30" pipe (Approximately 440 LF of new pipe). COGV Storm Drainage Master Plan (1986) PN#15 (Nodes70-69)

SUMMARY OF BASE PROJECT COST ESTIMATE
SD-L-6 Page 225
Item # 13.

Preliminary Cost Estimate Freeman Lane
Local Drainage Improvements
PROJECT DESCRIPTION:

Limits:

Proposed Improvement (Scope):

TOTAL DRAINAGE IMPROVEMENT ITEMS $489,000
ROCK EXCAVATION 50% $244,500
TOTAL PROJECT CONSTRUCTION COSTS $733,500
ENVIRONMENTAL MITIGATION 10% $73,350
ENGINEERING DESIGN COSTS 20% $146,700
CONSTRUCTION MANAGEMENT 15.0% $110,025
PROJECT CONSTRUCTION COSTS $733,500
TOTAL BASE PROJECT COSTS $1,063,575
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Along Freeman Lane from Wolf Creek to a point 1000' towards Talorville Road.

Desing and construct drainage improvemetns along Freeman Lane to correct deficiencies.

SUMMARY OF BASE PROJECT COST ESTIMATE
SD-L-10 Page 226
Item # 13.

Preliminary Cost Estimate Matson Creek Lateral
Regional Drainage Improvements
PROJECT DESCRIPTION:

Limits:

Proposed Improvement (Scope):

TOTAL DRAINAGE IMPROVEMENT ITEMS $153,361
ROCK EXCAVATION 10% $15,336
TOTAL PROJECT CONSTRUCTION COSTS $168,697
ENVIRONMENTAL MITIGATION 10% $16,870
ENGINEERING DESIGN COSTS 20% $33,739
CONSTRUCTION MANAGEMENT 15.0% $25,305
PROJECT CONSTRUCTION COSTS $168,697
TOTAL BASE PROJECT COSTS $244,611
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Across Parking Lot at 154 Hughes Road
Replace the existing inadequate system with a new 36" pipe or equivalent arch pipe (Approximately 220 LF of new pipe). COGV Storm Drainage Master Plan (1986) PN#17 (Nodes 31 to 33)

SUMMARY OF BASE PROJECT COST ESTIMATE
SD-R-7

Item # 13.

Preliminary Cost Estimate Matson Creek Phase 1
Regional Drainage Improvements
PROJECT DESCRIPTION:

Limits:

Proposed Improvement (Scope):

TOTAL DRAINAGE IMPROVEMENT ITEMS $1,042,350
ROCK EXCAVATION 10% $104,235
RIGHT OF WAY $500,000
TOTAL PROJECT CONSTRUCTION COSTS $1,646,585
ENVIRONMENTAL MITIGATION 10% $164,658
ENGINEERING DESIGN COSTS 15% $246,988
CONSTRUCTION MANAGEMENT 12.5% $205,823
PROJECT CONSTRUCTION COSTS $1,646,585
TOTAL BASE PROJECT COSTS $2,264,054
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Along Matson Creek from just north of Harris Street to Wolf Creek Replace the existing undersized box culvert with a new 66" pipe or equivalent arch pipe (Approximately 650 LF of new pipe). COGV Storm Drainage Master Plan (1986) PN#3 (Nodes 66 to 68 & under E. Main St.)

SUMMARY OF BASE PROJECT COST ESTIMATE
SD-R-3

Item # 13.

Preliminary Cost Estimate Matson Creek Phase 2
Regional Drainage Improvements
PROJECT DESCRIPTION:

Limits:

Proposed Improvement (Scope):

TOTAL DRAINAGE IMPROVEMENT ITEMS $1,420,067
ROCK EXCAVATION 10% $142,007
TOTAL PROJECT CONSTRUCTION COSTS $1,562,073
ENVIRONMENTAL MITIGATION 10% $156,207
ENGINEERING DESIGN COSTS 15% $234,311
CONSTRUCTION MANAGEMENT 12.5% $195,259
PROJECT CONSTRUCTION COSTS $1,562,073
TOTAL BASE PROJECT COSTS $2,147,851
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Along Matson Creek from just W. Berryhill Drive to Harris Street Replace the existing undersized box culvert and open channel with a new 66" pipe or equivalent arch pipe (Approximately 935 LF of new pipe).

COGV Storm Drainage Master Plan (1986) PN#13 (Nodes 43 to 66)

SUMMARY OF BASE PROJECT COST ESTIMATE
SD-R-6

Item # 13.

Preliminary Cost Estimate Park Avenue to Ocean Avenue
Drainage Improvements
PROJECT DESCRIPTION:

Limits:

Proposed Improvement (Scope):

TOTAL DRAINAGE IMPROVEMENT ITEMS $451,300
ROCK EXCAVATION 50% $225,650
TOTAL PROJECT CONSTRUCTION COSTS $676,950
ENVIRONMENTAL MITIGATION 10% $67,695
ENGINEERING DESIGN COSTS 20% $135,390
CONSTRUCTION MANAGEMENT 15.0% $101,543
PROJECT CONSTRUCTION COSTS $676,950
TOTAL BASE PROJECT COSTS $981,578
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Park Avenue to Ocean Avenue
Replace existing 8" storm drain with 15" and 18" pipe, from a DI located in Park Avenue, 375' west of S. Auburn Street to a DI located on Marshall Street, 200' north of Empire Street. Replace existing 15" SD with an 18" SD and extend 18" SD from Marshall Street to Ocean Avenue.

SUMMARY OF BASE PROJECT COST ESTIMATE
SD-L-13

Item # 13.

Preliminary Cost Estimate South Auburn Phase 2
Regional Drainage Improvements
PROJECT DESCRIPTION:

Limits:

Proposed Improvement (Scope):

TOTAL DRAINAGE IMPROVEMENT ITEMS $919,512
ROCK EXCAVATION 10% $91,951
TOTAL PROJECT CONSTRUCTION COSTS $1,011,463
ENVIRONMENTAL MITIGATION 10% $101,146
ENGINEERING DESIGN COSTS 15% $151,719
CONSTRUCTION MANAGEMENT 12.5% $126,433
PROJECT CONSTRUCTION COSTS $1,011,463
TOTAL BASE PROJECT COSTS $1,390,761
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Along South Auburn from Berryman Street to Hwy 49 Frontage Replace the existing undersized and inadequate system with a new pipe or equivalent arch pipe (Approximately 1250 LF of new pipe). COGV Storm Drainage Master Plan (1986) PN#11 (Nodes 3 to 12)

SUMMARY OF BASE PROJECT COST ESTIMATE
SD-R-5

Item # 13.

Preliminary Cost Estimate Slide Ravine
Local Drainage Improvements
PROJECT DESCRIPTION:

Limits:

Proposed Improvement (Scope):

TOTAL DRAINAGE IMPROVEMENT ITEMS $407,515
ROCK EXCAVATION 50% $203,758
TOTAL PROJECT CONSTRUCTION COSTS $611,273
ENVIRONMENTAL MITIGATION 10% $61,127
ENGINEERING DESIGN COSTS 20% $122,255
CONSTRUCTION MANAGEMENT 15.0% $91,691
PROJECT CONSTRUCTION COSTS $611,273
TOTAL BASE PROJECT COSTS $886,345
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Along Slide Ravine from upstream end of Centerville Flume Phase 4 to Carol Drive Replace the existing inadequate natural channel with a new 42" pipe (Approximately 500 LF of new pipe). COGV Storm Drainage Master Plan (1986) (Nodes14 to the 500' north)

SUMMARY OF BASE PROJECT COST ESTIMATE
SD-L-11 Page 232
Item # 13.

Preliminary Cost Estimate Woodpecker Ravine
Regional Drainage Improvements
PROJECT DESCRIPTION:

Limits:

Proposed Improvement (Scope):

TOTAL DRAINAGE IMPROVEMENT ITEMS $798,363
ROCK EXCAVATION 10% $79,836
TOTAL PROJECT CONSTRUCTION COSTS $878,199
ENVIRONMENTAL MITIGATION 10% $87,820
ENGINEERING DESIGN COSTS 15% $131,730
CONSTRUCTION MANAGEMENT 12.5% $109,775
PROJECT CONSTRUCTION COSTS $878,199
TOTAL BASE PROJECT COSTS $1,207,523
ESTIMATE PREPARED February 2022
BASE YEAR 2022
From a point in Colfax Avenue (200' feet west of Henderson Street) to a point in Memorial Lane (470ft south of Colfax Avenue)
Replace the existing undersized pipe with a new 60" pipe or equivalent arch pipe (Approximately 650 LF of new pipe). COGV Storm Drainage Master Plan (1986) PN#6 (Nodes40 to 44)

SUMMARY OF BASE PROJECT COST ESTIMATE
SD-R-2 Page 233
Item # 13.

Preliminary Cost Estimate Washington-Bennett
Local Drainage Improvements
PROJECT DESCRIPTION:

Limits:

Proposed Improvement (Scope):

TOTAL DRAINAGE IMPROVEMENT ITEMS $78,672
ROCK EXCAVATION 50% $0
TOTAL PROJECT CONSTRUCTION COSTS $78,672
ENVIRONMENTAL MITIGATION 2% $1,573
ENGINEERING DESIGN COSTS 20% $15,734
CONSTRUCTION MANAGEMENT 15.0% $11,801
PROJECT CONSTRUCTION COSTS $78,672
TOTAL BASE PROJECT COSTS $107,780
ESTIMATE PREPARED February 2022
BASE YEAR 2022
Along Bennett Street from Wolf Creek to East Main Street and along Richardson Street between East Main Street and Washignton Street
Replace the existing inadequate drainage system (Constructed as part of Richardson Street Extension Project) with a new 18" pipe. COGV Storm Drainage Master Plan (1986) (PN#24,Nodes1 to 7) Construction Cost based on actual cost.

SUMMARY OF BASE PROJECT COST ESTIMATE
SD-L-23 Page 234
Item # 13.

Prepared by NBS for the City of Grass Valley

APPENDIX B
Fee Comparison

Item # 13.

City of Grass Valley
Development Impact Fee Study 2022 APPENDIX BFee Comparison Development Impact Fee Type Current Fee 2 CITY OF AUBURN 4 CITY OF LINCOLN 5 TOWN OF TRUCKEE 6 CITY OF ROCKLIN 7 NEVADA COUNTY 8 Residential - Single Family or >1,200 s.f.

Parks $2945.92 per d.u. $2,985.31 - $3,127.46 per d.u. $3,500 per d.u. $1.99 per s.f. Community Park Fee: $711 per $2,495 - $2,428 Fire $870.19 per d.u. $603.88 - $738.08 per d.u. $362.66 per d.u. $1.20 per s.f. $0.42 per s.f.

Police $346.82 per d.u. $606.49 - $673.88 per d.u. n/a n/a n/aGeneral Gov't. / Public Buildings $478.57 per d.u. $1,158.19 - $1,213.34 per d.u. n/a $1.55 per s.f. n/aStorm Drainage $822.51 per d.u. $ 1,722.17 per Acre $1,507 per ESU $1059.96 - $1795.3 per EDU n/a n/a n/a Residential - Multi-Family or <1,200 s.f.

Parks $2423.49 per d.u. $2,700.99 - $2,843.15 per d.u. $3,500 per d.u. $2.85 per s.f. Community Park Fee: $569 per $1,721 - $2,428 Fire $715.87 per d.u. $295.23 - $469.68 per d.u. $383.09 per d.u. $1.20 per s.f. $0.42 per s.f.

Police $289.13 per d.u. $404.44 - $505.41 per d.u. n/a n/a n/aGeneral Gov't. / Public Buildings $393.87 per d.u. $1,047.89 - $1,103.04 per d.u. n/a $1.55 per s.f. n/aStorm Drainage $241.45 per d.u. 2,583.25 $ per Acre $1,507 per ESU $1059.96 - $1795.3 per EDU n/a n/a n/a

CITY OF GRASS VALLEY
Community
Services Fee
$7,607.72 per EDU
Community
Services Fee
$7,607.72 per EDU

COMPARISON AGENCIES
Proposed Fee 3
Public Facilities
Fee: $4,187 per
d.u.

Public Facilities
Fee: $2,130 per
d.u.

NBS - Local Government SolutionsWeb: www.nbsgov.com | Toll-Free:800.676.7516 5/4/2023 1 of 5

Item # 13.

City of Grass Valley
Development Impact Fee Study 2022 APPENDIX BFee Comparison Development Impact Fee Type Current Fee 2 CITY OF AUBURN 4 CITY OF LINCOLN 5 TOWN OF TRUCKEE 6 CITY OF ROCKLIN 7 NEVADA COUNTY 8

CITY OF GRASS VALLEY COMPARISON AGENCIES
Proposed Fee 3
Commercial
Parks n/a n/a $994.82 per KSF n/a n/a n/aFire
$463.38 - $772.29
per range of gross
leasable area
$ per KSF 372.31
$620 per KSF Retail;
$1,620 per KSF
Restaurant/Bar/Lou
nge
$370.82 per KSF $1.27 per s.f. $0.84 per s.f.

Police
$382.82 - $635.05
per range of gross
leasable area
$ per KSF n/a 731.15 1,419.94 $ n/a n/a
General Gov't. / Public Buildings
$154.33 - $256.96
per range of gross
leasable area
$ per KSF n/a 231.11 529.17 $ $1.57 per s.f. n/a
Storm Drainage $116.40 per KSF of impervious surface $ per Acre $1,507 per ESU 3,444.34 $518.95 - $879.26 per KSF n/a n/a n/a n/a
Public Facilities
Fee: $1.12 per s.f.

NBS - Local Government SolutionsWeb: www.nbsgov.com | Toll-Free:800.676.7516 5/4/2023 2 of 5

Item # 13.

City of Grass Valley
Development Impact Fee Study 2022 APPENDIX BFee Comparison Development Impact Fee Type Current Fee 2 CITY OF AUBURN 4 CITY OF LINCOLN 5 TOWN OF TRUCKEE 6 CITY OF ROCKLIN 7 NEVADA COUNTY 8

CITY OF GRASS VALLEY COMPARISON AGENCIES
Proposed Fee 3
Hotel/Lodging
Parks n/a n/a n/a n/a n/a n/aFire $164.75 per Room $ 600.94 per Room $530 per KSF n/a $1.27 per s.f. n/a $0.84 per s.f.Police $126.88 per Room $ 465.13 per n/a n/a n/a n/a n/aGeneral Gov't. / Public Buildings $54.93 per Room $ 121.37 per n/a n/a $1.57 per s.f. n/a n/aStorm Drainage n/a $ 3,444.34 per Acre $1,507 per ESU n/a n/a n/a n/a Office
Parks n/a n/a $994.82 per KSF n/a n/a n/aFire
$854.95 - $1037.95
per range of gross
leasable area
$ per KSF $290 per KSF $370.82 per KSF $1.85 per s.f. $0.79 per s.f. 102.39 Police
$174.50 - $297.36
per range of gross
leasable area
$ per KSF n/a $731.15 per KSF n/a n/a 219.69
General Gov't. / Public Buildings
$288.54 - $345.66
per range of gross
leasable area
$ per KSF n/a $231.11 per KSF $1.57 per s.f. n/a 470.91 Storm Drainage n/a $ 3,444.34 per Acre $1,507 per ESU $518.95 - $879.26 per KSF n/a n/a n/a n/a
Public Facilities
Fee: $1.49 per s.f.
n/a
NBS - Local Government SolutionsWeb: www.nbsgov.com | Toll-Free:800.676.7516 5/4/2023 3 of 5

Item # 13.

City of Grass Valley
Development Impact Fee Study 2022 APPENDIX BFee Comparison Development Impact Fee Type Current Fee 2 CITY OF AUBURN 4 CITY OF LINCOLN 5 TOWN OF TRUCKEE 6 CITY OF ROCKLIN 7 NEVADA COUNTY 8

CITY OF GRASS VALLEY COMPARISON AGENCIES
Proposed Fee 3
Medical Office
Parks n/a n/a n/a n/a n/a n/a Fire $939.51 per KSF $ 663.49 per KSF $ 1,050 n/a $1.85 per s.f. n/a $0.79 per s.f.Police $472.71 per KSF $ 1,412.88 per KSF n/a n/a n/a n/a n/aGeneral Gov't. / Public Buildings $312.51 per KSF $ 451.49 per KSF n/a n/a $1.57 per s.f. n/a n/aStorm Drainage n/a $ 3,444.34 per Acre $1,507 per ESU n/a n/a n/a n/a Hospital Facilities
Parks n/a n/a n/a n/a n/a n/a Fire $782.82 per KSF $ 2,213.05 per KSF $1,050 per KSF n/a $1.82 per s.f. n/a n/a Police $229.87 per KSF $ 1,514.74 per KSF n/a n/a n/a n/a n/aGeneral Gov't. / Public Buildings $260.82 per KSF $ 3,514.83 per KSF n/a n/a n/a n/a n/aStorm Drainage n/a $ 3,444.34 per Acre $1,507 per ESU n/a n/a n/a n/a Light Industrial
Parks n/a n/a $1521.13 per KSF n/a n/a n/a Fire $534.73 per KSF $ 44.20 per KSF $110 per KSF $370.82 per KSF $0.91 per s.f. $0.44 per s.f. Police $91.36 per KSF $ 120.72 per KSF n/a $731.15 per KSF n/a n/aGeneral Gov't. / Public Buildings $18.55 per KSF $ 208.75 per KSF n/a $352.96 per KSF $0.96 per s.f. n/aStorm Drainage $112.79 per KSF $ 3,444.34 per Acre $1,507 per ESU $622.95 - $1054.70 per KSF n/a n/a n/a n/a
Public Facilities
Fee: $0.74 per s.f.
n/a n/a
NBS - Local Government SolutionsWeb: www.nbsgov.com | Toll-Free:800.676.7516 5/4/2023 4 of 5

Item # 13.

City of Grass Valley
Development Impact Fee Study 2022 APPENDIX BFee Comparison Development Impact Fee Type Current Fee 2 CITY OF AUBURN 4 CITY OF LINCOLN 5 TOWN OF TRUCKEE 6 CITY OF ROCKLIN 7 NEVADA COUNTY 8

CITY OF GRASS VALLEY COMPARISON AGENCIES
Proposed Fee 3
Manufacturing
Parks n/a n/a $1521.13 per KSF n/a n/a n/a Fire $391.61 per KSF $ 102.87 per KSF $110 per KSF $370.82 per KSF n/a n/a $0.44 per s.f. Police $49.95 per KSF $ 59.87 per KSF n/a $731.15 per KSF n/a n/a n/aGeneral Gov't. / Public Buildings $138.13 per KSF $ 300.99 per KSF n/a $352.96 per KSF n/a n/a n/aStorm Drainage $112.79 per KSF $ 3,444.34 per Acre $1,507 per ESU $622.95 - $1054.70 per KSF n/a n/a n/a Warehouse
Parks n/a n/a n/a n/a n/a n/a Fire $295.40 per KSF $ 41.70 per KSF n/a n/a $0.91 per s.f. n/a $0.44 per s.f. Police $64.89 per KSF $ 104.45 per KSF n/a n/a n/a n/a n/aGeneral Gov't. / Public Buildings $98.75 per KSF $ 92.24 per KSF n/a n/a $0.96 per s.f. n/a n/aStorm Drainage n/a $ 3,444.34 per Acre $1,507 per ESU n/a n/a n/a n/a Notes:
1 DU = dwelling unit; KSF = 1,000 gross sq ft of building area2 Residential - >1,200 s.f. assumes Single Family rate; <1,200 s.f. assumes Multi Family rate; 3 Proposed fees are maximum fees established by the NBS Impact Fee Study4 Auburn fees effective 20225 Lincoln fees effective October 1, 20196 Truckee fees as of February 2022; 7 Rocklin Fee Schedule eff. 7/1/22; Public Facilities fees include public safety, and general government facilities8 County of Nevada Park and Recreation Facilities Mitigation Fees FY 23; Nevada County Consolidated Fire District Fees as of August 2022, n/an/a
NBS - Local Government SolutionsWeb: www.nbsgov.com | Toll-Free:800.676.7516 5/4/2023 5 of 5

Item # 13.

City of Grass Valley
City Council
Agenda Action Sheet
Title: Water and Wastewater User Rates– Draft Rate Study CEQA: Not a Project
Recommendation: That Council 1) receive a presentation on the Water and Wastewater rate study process and findings, 2) review the Proposition 218 Notice for maximum rate adjustments for Water and Wastewater User Rates, 3) receive an informational update on the implementation process for the proposed Water and Wastewater User Rates adjustments.

Prepared by: Bjorn P. Jones, PE, City Engineer
Council Meeting Date: 5/9/2023 Date Prepared: 5/3/2023
Agenda: Administrative
Background Information: In September 2021, the City entered into a professional services agreement with NBS for the development of a Water and Sewer Rate Study as well as a Development Nexus and Impact Fee Study, which will be discussed in a separate item. City Water and Wastewater user rates were last adjusted in 2012 and due to aging infrastructure and inflationary pressures, City utility rates have fallen below the cost of providing service.

In order to ensure financial stability of the City’s Water and Wastewater Enterprise Funds, NBS was tasked with evaluating the rate structure and establishing proposed rates and scheduled adjustments as necessary to fund needed operating and maintenance costs, eliminate annual budget deficits, pay for critical repairs and replacements to the utility infrastructure, and comply with state-mandated environmental permit requirements.

Water rate adjustments are proposed to steadily phase in with a series of rate adjustments over the next five years to bring rates in line with funding needs. Water bills include a fixed charge based on meter size plus a quantity charge per 1,000 gallons of metered water use. The proposed maximum Water Rates table extracted from the Study Report is attached to this report. For informational purposes, the table also shows the annual rates anticipated (Maximum allowable) for each of the five years.

Similarly for Wastewater User Rates, Staff proposes to adopt the maximum rates shown on the table attached to this report. For informational purposes, the table also shows the annual rates anticipated during the next five years. Residential sewer bills include a fixed monthly charge for sewer service, similar to most agencies in California. The City charges reduced rates for apartments and mobile homes, which tend to discharge less wastewater than single family homes. Commercial sewer bills include a flat monthly charge plus a quantity charge based on water consumption.

Item # 14.

NBS representatives will give the Council a presentation summarizing the Rate Study process, demonstrating how the proposed rates affect the current typical residential bill and a comparison to other municipalities, and the next steps in the implementation process. Staff recommends that Council review the Proposition 218 Notice for maximum rate adjustments for Water and Wastewater User Rates, and provide comments to Staff concerning the proposed implementation of the proposed Water and Wastewater User Rates adjustments.

Council Goals/Objectives: Implementation of the proposed Water and Wastewater User Rates executes portions of work tasks towards achieving/maintaining Strategic Plan Goal #4 – Economic Development and Vitality and Goal #7 Water & Wastewater Systems & Underground Infrastructure.

Fiscal Impact: The proposed water and wastewater user rate will be phased in over time to minimize the annual impact on customers. The recommended rates are established to recover the cost of service and to maintain the long-term financial health of the enterprise funds for water and wastewater.

Funds Available: N/A Account #: N/A
Reviewed by: __ City Manager

Item # 14.

ATTACHMENT 1: CURRENT AND PROPOSED WATER USER RATES TABLE FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Fixed Meter Charges
Monthly Fixed Service Charges:
5/8 inch $26.00 $30.06 $32.16 $34.41 $36.82 $39.40
3/4 inch $39.00 $37.09 $39.69 $42.47 $45.44 $48.62
1 inch $65.00 $51.14 $54.72 $58.55 $62.65 $67.04

1.5 inch $130.00 $86.29 $92.33 $98.79 $105.71 $113.11
2 inch $208.00 $128.46 $137.45 $147.07 $157.36 $168.38
3 inch $390.00 $578.30 $618.78 $662.09 $708.44 $758.03
4 inch $650.00 $894.60 $957.22 $1,024.23 $1,095.93 $1,172.65 6 inch $1,300.00 $1,773.19 $1,897.31 $2,030.12 $2,172.23 $2,324.29 8 inch $2,080.00 $2,827.51 $3,025.44 $3,237.22 $3,463.83 $3,706.30 Commodity Charges
Rate per Tgal of Water Consumed:

Residential Uniform Rate $3.75 $4.17 $4.46 $4.77 $5.10 $5.46 Non-Residential Uniform Rate $4.48 $4.17 $4.46 $4.77 $5.10 $5.46 Temporary Meter Uniform Rate $4.48 $4.17 $4.46 $4.77 $5.10 $5.46 Water Rate Schedule Current
Rates
Proposed Rates

Item # 14.

ATTACHMENT 2: CURRENT AND PROPOSED WASTEWATER USER RATES TABLE FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
FIXED MONTHLY CHARGES (per unit)
Single Family/Duplex $55.00 $52.76 $53.82 $54.90 $56.00 $57.12 Multi Family $43.19 $37.04 $37.78 $38.54 $39.31 $40.10
Mobile Home $31.66 $37.04 $37.78 $38.54 $39.31 $40.10
Commercial $21.73 $32.62 $33.28 $33.95 $34.63 $35.32
NON-RESIDENTIAL VOLUMETRIC CHARGES PER TGAL 1
Commercial
Class A Usage2
$4.43 $4.52 $4.61 $4.70 $4.79 $4.89
Class B Usage3
$5.34 $5.68 $5.79 $5.91 $6.03 $6.15
Class C Usage4
$9.42 $13.31 $13.58 $13.85 $14.13 $14.41
Class D Usage5
$3.96 $4.10 $4.18 $4.26 $4.35 $4.44

1. Tgal = thousand gallon, or 1,000 gallons

2. Standard strength commercial customers include general, theaters, laundries, fairgrounds & dumping at WWTP.

3. Moderate strength commercial customers include hotels & motels.

4. High strength commercial customers include restaurants.

5. Class D commercial customers include schools.

Sewer Rate Schedule Current
Rates
Proposed Sewer Rates

Item # 14.

OFFICE LOCATIONS:

Temecula – Corporate Headquarters
32605 Temecula Parkway, Suite 100
Temecula, CA 92592
San Francisco – Regional Office
870 Market Street, Suite 1223
San Francisco, CA 94102
California Satellite Offices
Atascadero, Davis
Huntington Beach,
Joshua Tree, Riverside
Sacramento, San Jose
www.nbsgov.com
Prepared by:

CITY OF

GRASS VALLEY
Draft Report
Water and
Wastewater
Rate Studies
May 2023

Item # 14.

City of Grass Valley
Water and Wastewater Rate Study Report
This page left blank intentionally.

Item # 14.

City of Grass Valley
Water and Wastewater Rate Study Report TOC

TABLE OF CONTENTS
Section 1. Executive Summary...........................................................................................1 Background and Purpose ....................................................................................................1 Key Findings.........................................................................................................................1 Study Recommendations ....................................................................................................1 Section 2. Overview of the Study Methodology .................................................................2 Rate Design Criteria.............................................................................................................2 Rate Structure Terminology ................................................................................................3 Section 3. Water Rate Study ..............................................................................................5 Developing Recommended Water Rates............................................................................5 Water Utility Revenue Requirements.................................................................................5 Characteristics of Water Customers by Class......................................................................7 Cost of Service Analysis – Water.......................................................................................10 Current vs. Proposed Water Rate Structures....................................................................12 Comparison of Current and Proposed Monthly Bills ........................................................13 Section 4. Wastewater Rate Study................................................................................... 17 Developing Recommended Wastewater Rates ................................................................17 Wastewater Utility Revenue Requirements......................................................................17 Cost of Service Analysis – Wastewater .............................................................................19 Current vs. Proposed Wastewater Rates..........................................................................22 Section 5. RECOMMENDATIONS AND NEXT STEPS ........................................................... 26 Consultant Recommendations..........................................................................................26 Next Steps..........................................................................................................................26

Item # 14.

City of Grass Valley
Water and Wastewater Rate Study Report TOC
Section 6. Appendix A - ABBREVIATIONS & ACRONYMS................................................... 27 Section 7. Appendix B – Water Rate Summary Tables ...................................................... 29 Section 8. Appendix C – Wastewater Rate Summary Tables............................................. 31

Item # 14.

City of Grass Valley
Water and Wastewater Rate Study Report TOC
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Item # 14.

City of Grass Valley
Water and Wastewater Rate Study Report TOF

TABLE OF FIGURES
Figure 1. Primary Components of a Rate Study ................................................................................................... 2 Figure 2. Summary of Water Revenue Requirements.......................................................................................... 7 Figure 3. Summary of Water Reserve Funds........................................................................................................ 7 Figure 4. Water Consumption by Customer Class................................................................................................ 8 Figure 5. Peaking Factors by Customer Class ....................................................................................................... 9 Figure 6. Number of Accounts by Customer Class ............................................................................................. 10 Figure 7. Summary of Fixed and Variable Rate Revenue Requirements............................................................ 11 Figure 8. Summary of Adjusted Rate Revenue Requirements by Customer Class............................................. 12 Figure 9. Current and Proposed Water Rates Fiscal Year 2022/23 – 2026/27................................................... 13 Figure 10. Monthly Water Bill Comparison for SFR Customers.......................................................................... 14 Figure 11. Monthly Water Bill Comparison with Other Communities............................................................... 15 Figure 12. Monthly Water Bill Comparison for Commercial Users.................................................................... 16 Figure 13. Summary of Wastewater Revenue Requirements............................................................................ 18 Figure 14. Summary of Wastewater Reserve Funds .......................................................................................... 18 Figure 15. Summary of Estimated Flow to Treatment Plant.............................................................................. 19 Figure 16. Summary of Flow and Strength (BOD & TSS) Characteristics by Customer Class............................. 20 Figure 17. Summary of Wastewater customer Accounts and EDU’s ................................................................. 21 Figure 18. Summary of Adjusted Rate Revenue Requirements by Customer Class........................................... 21 Figure 19. Current and Proposed Wastewater Rates......................................................................................... 22 Figure 20. Monthly Single-Family Wastewater Bill Comparison ........................................................................ 23 Figure 21. Monthly Single-Family Wastewater Bill Comparison with Other Communities ............................... 24 Figure 22. Monthly Single-Family Wastewater Bill Comparison with Other Communities ............................... 24 Figure 23. Monthly CLASS A-Strength Commercial Wastewater Bill Comparison ............................................. 25

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City of Grass Valley
Water and Wastewater Rate Study Report 1
Section 1. EXECUTIVE SUMMARY
Purpose
The overall purpose of the rate study was to develop the proposed water and wastewater rates. The rate study required thoroughly reviewing and confirming the City’s broader rate-related goals and objectives, including key financial parameters, and ensuring the new rates reflect the City’s unique characteristics and provide long-term revenue stability.

The rates developed in this study are intended to meet the requirements of Proposition 218 (Prop 218), commonly referred to as the “right to vote on new taxes” act and were developed in a manner that is consistent with industry standards. This report is provided in part to assist the City in its effort to communicate transparently with the residents and businesses it serves.

In developing proposed utility rates, NBS and City staff worked cooperatively in developing study results and rate alternatives. The City Council reviewed initial results, provided NBS and City staff with feedback and direction, and ultimately approved the water and wastewater rates.

Key Findings

REVENUE REQUIREMENTS AND PROJECTED RATES
The City’s water and wastewater utilities both need to complete ongoing rehabilitation and replacement projects while at the same time building and maintaining healthy reserve funds. NBS calculated two scenarios of rate increases as will be discussed in sections 2 and 3 in this report.

WATER RATES
The current water rate design was retained; where water customers will be charged a monthly fixed service charge by meter size, and a volumetric charge based on water consumption for all customers, grouped by residential and non-residential. Although increases are proposed, customer bills under the recommended water rates still compare favorably with other communities in the region.

WASTEWATER RATES
The current wastewater rate design retained; where wastewater customers will be charged a monthly fixed service charge by living unit for all customers, and a volumetric charge based on water consumption for non-residential customers. As with water rates, although increases are recommended, customer bills under the recommended wastewater rates still compare favorably with other communities in the region.

Study Recommendations
NBS recommends the City take the following measures:
 Conduct a legal review of the proposed rates.
 Proceed with Prop 218 noticing requirements and 45-day protest period.  Assuming a successful Prop 218 process (that is, there is no majority protest of the rates), adopt the rates summarized in this report.

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City of Grass Valley
Water and Wastewater Rate Study Report 2
Section 2. OVERVIEW OF THE STUDY METHODOLOGY
Comprehensive rate studies such as this one typically includes three components: (1) preparation of a financial plan, which identifies the net revenue requirements for the utility; (2) analysis of the cost to serve each customer class, and; (3) the rate structure design. These steps are shown in Figure and are intended to follow industry standards and reflect the fundamental principles of cost-of-service ratemaking embodied in the American Water Works Association (AWWA) Principles of Water Rates, Fees, and Charges1, also referred to as Manual M1 as well as the Water Environment Federation’s (WEF) Financing and Charges for Wastewater Systems, Manual of Practice No 27, Fourth Edition.

FIGURE 1. PRIMARY COMPONENTS OF A RATE STUDY
N
This methodology also addresses requirements under Proposition 218 that rates not exceed the cost of providing the service and be proportionate to the cost of providing service for all customers. In terms of the chronology of the study, these three steps represent the order they were performed in this Study for both utilities.

As a part of this rate study, NBS projected revenues and expenditures, developed net revenue requirements, performed cost-of-service rate analyses, and prepared new utility rates for the City. As a result of this study, rate increases – or more accurately, increases in the total revenue collected from rates – are recommended for each utility. The City provided NBS with the necessary data, including historical, current, and projected revenues, expenditures, customer accounts and water consumption, along with other operational and capital cost data.

Rate Design Criteria
It is important for utilities to send proper price signals to its customers about the actual cost of providing service. This objective is typically addressed through both the magnitude of the rates and the rate structure design. In other words, both the amount of revenue collected and the way in which the revenue is collected from customers are important.

Several criteria are typically considered in setting rates and developing sound rate structures. The fundamentals of this process have been documented in a number of rate-setting manuals. For example, the foundation for evaluating rate structures is generally credited to James C. Bonbright in the Principles of

1 Principles of Water Rates, Fees, and Charges, Manual of Water Supply Practices, M1, AWWA, seventh edition, 2017.

Step 3: Rate Design - Considers
what rate structure will best meet
the City’s need to collect rate
revenue from each customer class.

Step 2: Cost-of-Service Analysis –
Proportionately allocates the revenue
requirements to the customer classes
in compliance with industry standards
and State Law.

Step 1: Financial Plan/ Revenue
Requirements – Compares current
sources and uses of funds and
determines the revenue needed
from rates and project rate
adjustments.

FINANCIAL PLAN/

REVENUE

REQUIREMENTS

COST-OF-SERVICE

ANALYSIS
RATE DESIGN 1 2 3 ANALYSIS

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City of Grass Valley
Water and Wastewater Rate Study Report 3
Public Utility Rates2, which outlines pricing policies, theories, and economic concepts along with various rate designs. The other common industry standard is the American Water Works Association’s (AWWA) Manual M1.

The following is a simplified list of the attributes of a sound rate structure, which apply to water and wastewater utilities:
 Rates should be easy to understand from the customer’s perspective.  Rates should be easy to administer from the utility’s perspective.  Rates should promote the efficient allocation of the resource.  Rates should be equitable and non-discriminating (i.e., cost based).  There should be continuity in the ratemaking philosophy over time.  Other utility policies should be considered (e.g., encouraging conservation & economic development).
 Rates should consider the customer’s ability to pay.
 Rates should provide month-to-month and year to year revenue stability.

Rate Structure Terminology
One of the most fundamental points in considering rate structures is the relationship between fixed and variable costs. The vast majority of water and wastewater rate structures contain a fixed or minimum charge, and a volumetric charge.

The City’s rate design criteria are unique to the characteristics of the City’s utilities. Capital and operational reserve funding targets used in this study have been established with the input of City staff in order to meet specific utility objectives. The following discussion describes general industry rate-study practices in California and principals that were reflected in the recommended rates.

FIXED CHARGES
Fixed charges can be called base charges, minimum monthly charges, customer charges, fixed meter charges, etc. Although fixed charges are typically a significant percentage of the utility’s overall cost structure, utilities rarely collect 100% of their fixed costs through fixed charges. In general, customers prefer that charges include a volumetric component, as there is an inherent and widely recognized equity in a “pay-for-what-you-use” philosophy.

For a water utility, fixed charges typically increase by meter size. For example, a customer with a 2" meter may have a fixed meter charge that is eight times greater than the 5/8” meter charge based on the meter’s maximum flow rate.
3 Because a large portion of water utilities’ costs are typically related to meeting capacity requirements, reflecting the capacity demands of each meter size is important in establishing equitable fixed charges for customers.

2 James C. Bonbright; Albert L. Danielsen and David R. Kamerschen, Principles of Public Utility Rates, (Arlington, VA: Public Utilities Report, Inc., Second Edition, 1988), p. 383-384.
3 These are typically referred to as “hydraulic capacity factors” that represent the relative capacity required in the water system.

See American Water Works Association, Water Meters – Selection, Installation, Testing and Maintenance, M6 Manual, Table 5-3.

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City of Grass Valley
Water and Wastewater Rate Study Report 4

VARIABLE (CONSUMPTION-BASED) CHARGES
In contrast, variable costs such as the cost of purchased water, electricity used in pumping water, and chemicals used in the water and wastewater treatment facilities tend to change with the quantity of water produced (or wastewater effluent treated). For water utilities, variable charges are generally based on metered consumption and charged on a dollar-per-unit cost (per 100 cubic feet, or hcf, in the City’s case).

There are significant variations in the basic philosophy of variable charge rate alternatives. Under a uniform (single tier) water rate structure, the cost per unit does not change with consumption, and provides a simple and straightforward approach from the perspective of customer understanding and rate administration/billing. A similar volumetric rate is often used for wastewater utilities to reflect the flowrelated costs (i.e., sewage effluent) as well as the costs of treating the level of wastewater “strength” (i.e., the amount of biochemical oxygen demand (BOD) and total suspended solids (TSS) constituents).

KEY FINANCIAL ASSUMPTIONS
The following are the key assumptions used in the water and wastewater rate analyses:
 Funding Capital Projects – The analysis for both utilities assumes:
 Capital costs attributable to existing customers are funded with rate revenue.  Capital costs attributable to growth, or expansion-related costs, will be funded through connection fee revenue.
 All capital projects listed in the financial plans are City projections.  Outside funding may be sought out for capital improvement projects.  Reserve Targets for Water and Wastewater – Reserves for operations and capital needs are set at levels established by City staff and Council. Reserve targets used in the analysis are as follows:
 Operating & Maintenance Reserve – 90 days of O&M expenses  Capital Rehabilitation and Replacement Reserve – 3 percent of net asset values for wastewater and 6 percent of net asset values for water
 System Reinvestment Reserve Fund - $300,000 annually for ongoing maintenance  Emergency Reserve Fund - $300,000 for emergency revenue stability  Inflation and Growth Projections – Inflation and growth projections are applied equally to the water and wastewater utilities:
 General inflation is 3 percent annually, per Bureau of Labor for Nevada County and California State projections.
 Customer growth is 0 percent annually, per City projections.  Labor cost inflation is 1.5 percent annually, per Bureau of Labor for Nevada County and California State projections.
 Energy cost inflation is 1.5 percent annually, per Bureau of Labor for Nevada County and California State projections.
 Fuel cost inflation is 7.5 percent annually, per Bureau of Labor for Nevada County and California State projections.

The next two sections discuss the water and wastewater rate studies in further detail.

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Water and Wastewater Rate Study Report 5
Section 3. WATER RATE STUDY
Developing Recommended Water Rates
The water rate analysis was undertaken with a few specific objectives in mind, including:
 Generating sufficient additional revenue needed to meet projected funding requirements,  Providing revenue stability,
 Providing equity among customer classes,
 Incorporating projected water consumption levels.

NBS developed several water rate alternatives as requested by City staff over the course of this study. All rate structure alternatives were developed using industry standards and cost-of-service principles. The following are the basic components included in this analysis:
 Developing Cost Allocations: The water revenue requirements were “functionalized” into three categories: (1) fixed capacity costs; (2) commodity (or volume-based) costs; and (3) customer service costs. Each of these functional costs has a distinct allocation factor used to determine revenue requirements by customer class.
 Determining Revenue Requirements by Customer Class4: Revenue requirements for each customer class were determined based on allocation factors such as water consumption, capacity peaking factors, and number of accounts by meter size. For example, volume-related costs are allocated based on the water consumption for each class, while customer costs are allocated based on number of accounts. Once the costs are allocated and revenue requirement for each customer class is determined, collecting these revenue requirements from each customer class is addressed in the rate design task.
 Rate Design and Fixed vs. Variable Costs: Fixed costs, such as capacity-related and infrastructure costs, billing, and general administrative costs, are typically collected through a fixed monthly charge, while variable costs such as pumping and purchased water costs are typically collected through volumetric charges. While this study determined that the City’s fixed and variable costs are approximately 65% fixed and 35% variable, California law5 and industry practices provide flexibility regarding the actual percentages collected from fixed vs. variable rates. After evaluating various rate alternatives, a rate structure that recovers 45% fixed and 55% variable charges is proposed, based on direction from City staff and the City Council.

Water Utility Revenue Requirements
It is important for municipal utilities to maintain reasonable reserves in order to handle emergencies, fund working capital, maintain a good credit rating, and generally follow sound financial management practices.

Rate increases are governed by the need to meet these objectives as follows:

4 In the City’s case, meter sizes serve as customer classes for the water utility while more traditional customer classes, such as single-family, multi-family, and commercial classes were used for the wastewater utility. 5 For example, AB 2882 allows a variety of conservation-oriented rate structures, including tiered water rates, and the California Urban Water Conservation Council recommends recovering 70 percent of rate revenue through volume-based rates. However, water utilities generally develop their own policy and conservation objectives.

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Water and Wastewater Rate Study Report 6
 Meeting Operating Costs: For Fiscal Years 2023/24 through 2027/28, the net revenue requirement (i.e., total annual O&M expenses, debt service, and rate-funded capital costs less non-rate revenues) is estimated to be approximately $2 mil to $3 mil. If no rate increases are implemented, current revenue is expected to be insufficient to cover these operating costs.  Maintaining Adequate Bond Coverage: The City is required by its bond covenants for 4 current debt obligations to maintain debt-service coverage ratios of at least 1.20. The benefit of maintaining a higher coverage ratio is that it strengthens the City’s credit rating, which can help lower the interest rates for debt-funded capital projects, and in turn reduce annual debt service payments.

This analysis assumes that the City will be incurring $1.5 million in grants to fund the planned capital expenses.
 Building and Maintaining Reserve Funds: If no rate increases are implemented, reserves are expected to essentially be depleted by FY 2025/26. Implementing annual rate increases builds target reserve fund levels to appropriate levels. Primarily to minimize impacts on ratepayers, City staff chose to use the following reserve targets:
 Operating Reserves reserve target is equal to a three-month (or 90-day) cash cushion for normal operations. For Fiscal Year 2023/24, this is estimated to be $411,000. This reserve is intended to preserve financial viability in the event of short-term fluctuations in revenues and/or expenditures, including those due to weather patterns, the natural billing cycle cash flows, variability in volume-based rates, and changes in the age of receivables.  Capital Reserves of 6 percent of net assets serve as a starting point for addressing longer-term capital needs. For Fiscal Year 2023/24, this is estimated to be $276,000. If ratepayers can generate this level of revenues, the City will have reserved a partial cash resource that can be applied toward future capital replacement and rehabilitation needs.  System Reinvestment Reserve of $300,000 annually for any unplanned maintenance the City may occur.
 Emergency Reserve of $300,00 for any emergency situations.

Figure summarizes the sources and uses of funds and net revenue requirements for the next five years and includes the recommended annual rate increases.

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City of Grass Valley
Water and Wastewater Rate Study Report 7
FIGURE 2. SUMMARY OF WATER REVENUE REQUIREMENTS
Figure summarizes the projected reserve fund balances and reserve targets. A summary of the water utility’s proposed 10-year financial plan, which is included in Appendix B – Water Rate Study Summary Tables, includes revenue requirements, reserve funds, revenue sources, proposed rate increases, and the City’s capital improvement program.

FIGURE 3. SUMMARY OF WATER RESERVE FUNDS
Characteristics of Water Customers by Class
Water customer characteristics are used in allocating costs in the cost-of-service analysis. The City’s most recent data by customer class includes the consumption data in Figure , peaking factors in Figure , and the total number of accounts in Figure .

FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 Sources of Water Funds
Rate Revenue Under Prevailing Rates $ 2,200,000 $ 2,200,000 $ 2,200,000 $ 2,200,000 $ 2,200,000 $ 2,200,000 Additional Revenue from Rate Increases 1
- 115,500 318,780 495,095 683,751 885,614
Projected Annual Rate Increase 0.00% 7.00% 7.00% 7.00% 7.00% 7.00% Non-Rate Revenues 80,000 80,000 80,000 80,000 80,000 80,000 Interest Earnings 57,150 56,370 57,200 54,705 47,547 41,049 Total Sources of Funds $ 2,337,150 $ 2,451,870 $ 2,655,980 $ 2,829,799 $ 3,011,298 $ 3,206,663 Uses of Water Funds
Operating Expenses $ 1,572,379 $ 1,645,700 $ 1,723,800 $ 1,807,200 $ 1,896,000 $ 1,990,800 Debt Service 394,016 396,504 397,814 398,918 400,057 240,094 Rate-Funded Capital Expenses 332,023 - - - - 844,829
Total Use of Funds $ 2,298,418 $ 2,042,204 $ 2,121,614 $ 2,206,118 $ 2,296,057 $ 3,075,723 Surplus (Deficiency) after Rate Increase $ 38,732 $ 409,666 $ 534,366 $ 623,681 $ 715,240 $ 130,940 Cumulative Rate Increases 0.00% 7.00% 14.49% 22.50% 31.08% 40.26% Surplus (Deficiency) before Rate Increase $ 38,732 $ 294,166 $ 215,586 $ 128,586 $ 31,489 $ (754,674) Net Revenue Requirement 2$ 2,181,268 $ 1,925,834 $ 2,004,414 $ 2,091,414 $ 2,188,511 $ 2,974,674

1. Revenue from rate increases assume an implementation date of October 1, 2023 and then July 1st, 2024 through 2027.

2. Total Use of Funds less non-rate revenues and interest earnings. This is the annual amount needed from water rates.

Summary of Sources and Uses of Funds
and Net Revenue Requirements
Budget Projected
FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 Operating Reserve Fund
Ending Balance $ 393,095 $ 411,425 $ 430,950 $ 451,800 $ 474,000 $ 497,700 Recommended Minimum Target 393,095 411,425 430,950 451,800 474,000 497,700 Capital Outlay Reserve Fund
Ending Balance $ 2,037,555 $ 2,063,847 $ 1,910,154 $ 1,504,466 $ 1,132,944 $ 494,340 Recommended Minimum Target 273,400 276,000 301,900 336,900 372,400 407,100 System Reinvestment Reserve Fund
Ending Balance $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000 Recommended Minimum Target 300,000 300,000 300,000 300,000 300,000 300,000 Emergency Reserve Fund
Ending Balance $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000 Recommended Minimum Target 300,000 300,000 300,000 300,000 300,000 300,000 Debt Service Reserve Fund
Ending Balance $ 357,285 $ 363,931 $ 370,700 $ 377,595 $ 384,618 $ 391,772 Recommended Minimum Target - - - - - -
Total Ending Balance $ 3,387,935 $ 3,439,203 $ 3,311,804 $ 2,933,861 $ 2,591,562 $ 1,983,812 Total Recommended Minimum Target $ 1,266,495 $ 1,287,425 $ 1,332,850 $ 1,388,700 $ 1,446,400 $ 1,504,800 Beginning Reserve Fund Balances and
Recommended Reserve Targets
Budget Projected

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City of Grass Valley
Water and Wastewater Rate Study Report 8
FIGURE 4. WATER CONSUMPTION BY CUSTOMER CLASS
Development of the COMMODITY Allocation Factor
Summer Winter Average
Single Family Residential
5/8-inch meter 151,714 48.8% 11 4 7
3/4-inch meter 7,788 2.5% 10 6 8
1-inch meter 5,191 1.7% 79 16 48

1.5-inch meter 5,621 1.8% 296 28 156
2-inch meter 2,711 0.9% 423 33 226
Multi Family Residential
5/8-inch meter 3,738 1.2% 15 1 7
3/4-inch meter 4,916 1.6% 23 7 14
1-inch meter 3,966 1.3% 17 1 8

1.5-inch meter 12,804 4.1% 75 23 46
2-inch meter 14,508 4.7% 97 49 71
3-inch meter 18 0.0% 2 0 1
Mobile Home
5/8-inch meter 34 0.0% 4 2 3
Commercial
5/8-inch meter 25,760 8.3% 12 6 9
3/4-inch meter 6,945 2.2% 25 9 16
1-inch meter 9,351 3.0% 32 17 22

1.5-inch meter 26,551 8.5% 69 42 50
2-inch meter 9,282 3.0% 120 29 70
3-inch meter 6,465 2.1% 216 23 108
4-inch meter 7,661 2.5% 580 112 319
6-inch meter 2,440 0.8% 403 0 203
Fire Meter
2-inch fire meter - 0.0% 0 0 0
4-inch fire meter - 0.0% 0 0 0
Compound Meter 3,367 1.1% 84 2 35
Total 310,832 100% 17 6 125

1. Consumption is from June 2021 through January 2022. It has been annualized for estimation of full year.

Source file: Billed Consumption Excel Export_manipulated.xlsx Average Monthly Statistics per
Customer Class Meter (Tgal)
Volume
(Tgal)1
Percent of
Total
Volume

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City of Grass Valley
Water and Wastewater Rate Study Report 9
FIGURE 5. PEAKING FACTORS BY CUSTOMER CLASS
Development of the CAPACITY Allocation Factor
Customer Class
Average
Monthly
Use (Tgal)
Peak
Monthly
Use (Tgal)2
Peaking
Factor
Max
Monthly
Capacity
Factor
Single Family Residential
5/8-inch meter 12,643 20,532 1.62 49.5%
3/4-inch meter 649 801 1.23 1.9%
1-inch meter 433 712 1.65 1.7%

1.5-inch meter 468 888 1.90 2.1%
2-inch meter 226 423 1.87 1.0%
Multi Family Residential
5/8-inch meter 312 670 2.15 1.6%
3/4-inch meter 410 659 1.61 1.6%
1-inch meter 331 691 2.09 1.7%

1.5-inch meter 1,067 1,733 1.62 4.2%
2-inch meter 1,209 1,654 1.37 4.0%
3-inch meter 1 2 1.47 0.0%
Mobile Home
5/8-inch meter 3 4 1.30 0.0%
Commercial
5/8-inch meter 2,147 2,990 1.39 7.2%
3/4-inch meter 579 922 1.59 2.2%
1-inch meter 779 1,109 1.42 2.7%

1.5-inch meter 2,213 3,018 1.36 7.3%
2-inch meter 774 1,325 1.71 3.2%
3-inch meter 539 1,078 2.00 2.6%
4-inch meter 638 1,160 1.82 2.8%
6-inch meter 203 403 1.98 1.0%
Fire Meter
2-inch fire meter 0 0 0.00 0.0%
4-inch fire meter 0 0 0.00 0.0%
Compound Meter 281 672 2.40 1.6%
Total 25,903 41,449 100%

2. Based on peak monthly data (peak day data not available).

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City of Grass Valley
Water and Wastewater Rate Study Report 10
FIGURE 6. NUMBER OF ACCOUNTS BY CUSTOMER CLASS
Cost of Service Analysis – Water
As previously noted in Figure , the purpose of the cost-of-service analysis is to fairly and equitably allocate annual water utility revenue requirements to customer classes, while the rate design determines the actual rates within each customer class. The first step of separating costs into commodity-, capacity-, and customer-related cost classifications is based on their functional purpose in the water utility: results are summarized in Figure , while more detailed fixed and variable allocations are shown in Appendix B.

Development of the CUSTOMER Allocation Factor
Customer Class
Number
of Meters1
Percent of
Total
Accounts
Single Family Residential
5/8-inch meter 1,851 74.3%
3/4-inch meter 81 3.3%
1-inch meter 9 0.4%

1.5-inch meter 3 0.1%
2-inch meter 1 0.0%
Multi Family Residential
5/8-inch meter 45 1.8%
3/4-inch meter 29 1.2%
1-inch meter 40 1.6%

1.5-inch meter 23 0.9%
2-inch meter 17 0.7%
3-inch meter 1 0.0%
Mobile Home
5/8-inch meter 1 0.0%
Commercial
5/8-inch meter 247 9.9%
3/4-inch meter 37 1.5%
1-inch meter 35 1.4%

1.5-inch meter 44 1.8%
2-inch meter 11 0.4%
3-inch meter 5 0.2%
4-inch meter 2 0.1%
6-inch meter 1 0.0%
Fire Meter
2-inch fire meter 0 0.0%
4-inch fire meter 0 0.0%
Compound Meter 8 0.3%
Total 2,491 100.0%

1. Meter Count is from November 2021.

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Water and Wastewater Rate Study Report 11
FIGURE 7. SUMMARY OF FIXED AND VARIABLE RATE REVENUE REQUIREMENTS The next step is to allocate these commodity-related, capacity-related, and customer-related costs to each customer class based on the allocation factors previously shown in Figure through Figure , as follows:
 Water consumption (Figure ) is used to allocate commodity-related variable costs shown in Figure .  Peaking factors (Figure ) are used to allocate the capacity-related costs shown in Figure .  Number of meters (Figure ) are used to allocate the customer-related costs shown in Figure .

The results of this cost allocation process are summarized in Figure :

Commodity - Related Costs $ 868,196 36.9%
Variable Capacity - Related Costs $ 426,504 18.1%
Fixed Capacity - Related Costs $ 581,055 24.7%
Customer - Related Costs $ 478,245 20.3%
Total $ 2,354,000 100%
Adjusted Net Revenue
Requirements
45% Fixed / 55% Variable
Functional
Category
Proposed Rates for FY
2023/24

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Water and Wastewater Rate Study Report 12
FIGURE 8. SUMMARY OF ADJUSTED RATE REVENUE REQUIREMENTS BY CUSTOMER CLASS Current vs. Proposed Water Rate Structures
Besides merely providing the mechanism for collecting rate revenue from individual customers, water rate design presents an opportunity to consider broader rate-design objectives and policies, including revenue stability, equity among customer classes, and water conservation.

During the rate-design analysis, City staff and NBS developed several water rate structure alternatives for consideration. As previously noted, after carefully considering Proposition 218 requirements and recent court cases, maintaining a uniform volumetric rate was, in the opinion of NBS, City staff, and the City’s legal counsel the most defensible rate structure. Additionally, maintaining the current meter sizes as customer classifications was also recommended – it maintains continuity with the City’s current design is easy for customers to understand, and easy for the City to administrate.

Net Revenue Requirements for FY 2023/24
Commodity -
Related
Costs
Variable
Capacity -
Related
Costs
Fixed
Capacity -
Related
Costs
Customer -
Related
Costs
Single Family Residential
5/8-inch meter $ 423,758 $ 211,275 $ 287,833 $ 355,372 $ 1,278,238 54% 3/4-inch meter 21,753 8,244 11,232 15,551 56,780 2%
1-inch meter 14,499 7,331 9,987 1,728 33,545 1%

1.5-inch meter 15,701 9,139 12,451 576 37,867 2%
2-inch meter 7,572 4,357 5,936 192 18,058 1%
Multi Family Residential
5/8-inch meter 10,441 6,896 9,395 8,640 35,372 2%
3/4-inch meter 13,731 6,781 9,238 5,568 35,317 2%
1-inch meter 11,078 7,114 9,691 7,680 35,562 2%

1.5-inch meter 35,764 17,834 24,296 4,416 82,310 3%
2-inch meter 40,522 17,018 23,185 3,264 83,989 4%
3-inch meter 50 23 31 192 296 0%
Mobile Home
5/8-inch meter 96 38 52 192 378 0%
Commercial
5/8-inch meter 71,951 30,765 41,913 47,421 192,050 8%
3/4-inch meter 19,398 9,485 12,923 7,104 48,910 2%
1-inch meter 26,117 11,415 15,551 6,720 59,803 3%

1.5-inch meter 74,159 31,055 42,309 8,448 155,971 7%
2-inch meter 25,927 13,635 18,576 2,112 60,250 3%
3-inch meter 18,059 11,094 15,115 960 45,228 2%
4-inch meter 21,398 11,938 16,263 384 49,983 2%
6-inch meter 6,816 4,150 5,654 192 16,813 1%
Fire Meter
2-inch fire meter - - - - - 0%
4-inch fire meter - - - - - 0%
Compound Meter 9,405 6,917 9,423 1,536 27,281 1%
Total Net Revenue Requirement $ 868,196 $ 426,504 $ 581,055 $ 478,245 $ 2,354,000 100% % of COS
Net
Revenue
Req'ts
Customer Classes
Cost of
Service Net
Rev. Req'ts
Classification Components

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City of Grass Valley
Water and Wastewater Rate Study Report 13
Figure compares the current and recommended rates for FY 2023/24 through 2027/28. Cost-of-service adjustments are reflected in the FY 2023/24 rates; thereafter rate increases are applied on an across-theboard basis. Appendix B provides more detail on the development of the proposed water rates.

FIGURE 9. CURRENT AND PROPOSED WATER RATES FISCAL YEAR 2023/24 – 2027/28 Comparison of Current and Proposed Monthly Bills

SINGLE-FAMILY WATER CUSTOMERS
Figure compares monthly water bills under the current and proposed rates, for single-family residential customers, in the first year of the rate adjustment plan. Figure compares current and proposed typical single-family monthly water bills to other communities.

FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Fixed Meter Charges
Monthly Fixed Service Charges:
5/8 inch $26.00 $30.06 $32.16 $34.41 $36.82 $39.40
3/4 inch $39.00 $37.09 $39.69 $42.47 $45.44 $48.62
1 inch $65.00 $51.14 $54.72 $58.55 $62.65 $67.04

1.5 inch $130.00 $86.29 $92.33 $98.79 $105.71 $113.11
2 inch $208.00 $128.46 $137.45 $147.07 $157.36 $168.38
3 inch $390.00 $578.30 $618.78 $662.09 $708.44 $758.03
4 inch $650.00 $894.60 $957.22 $1,024.23 $1,095.93 $1,172.65 6 inch $1,300.00 $1,773.19 $1,897.31 $2,030.12 $2,172.23 $2,324.29 8 inch $2,080.00 $2,827.51 $3,025.44 $3,237.22 $3,463.83 $3,706.30 Commodity Charges
Rate per Tgal of Water Consumed:

Residential Uniform Rate $3.75 $4.17 $4.46 $4.77 $5.10 $5.46 Non-Residential Uniform Rate $4.48 $4.17 $4.46 $4.77 $5.10 $5.46 Temporary Meter Uniform Rate $4.48 $4.17 $4.46 $4.77 $5.10 $5.46 Water Rate Schedule Current
Rates
Proposed Rates

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City of Grass Valley
Water and Wastewater Rate Study Report 14
FIGURE 10. MONTHLY WATER BILL COMPARISON FOR SFR CUSTOMERS

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Water and Wastewater Rate Study Report 15
FIGURE 11. MONTHLY WATER BILL COMPARISON WITH OTHER COMMUNITIES

COMMERCIAL WATER CUSTOMERS
Commercial customers are currently subject to the same fixed monthly charges by meter size and uniform volumetric rate as single-family customers. Figure compares current and proposed monthly bills for commercial customers with a 1.5-inch meter at various levels of consumption, in the first year of the rate adjustment plan.

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City of Grass Valley
Water and Wastewater Rate Study Report 16
FIGURE 12. MONTHLY WATER BILL COMPARISON FOR COMMERCIAL USERS

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City of Grass Valley
Water and Wastewater Rate Study Report 17
Section 4. WASTEWATER RATE STUDY
Developing Recommended Wastewater Rates
The wastewater rate study focused on key objectives similar to those considered in the water rate study, with the overriding concern being maintaining the financial health of the utility.

Similar wastewater rate tasks were performed, including (1) developing functional cost allocations, (2) developing revenue requirements by customer class, and (3) determining rates within customer classes.

Detailed tables showing the step-by-step development of the analysis are presented in Appendix C – Wastewater Rate Summary Tables.

Wastewater Utility Revenue Requirements
To identify the wastewater utility’s long-term financial needs, including funding for capital improvement projects, NBS developed a 10-year financial plan that forecasts wastewater revenues, expenditures, and projected reserves. This plan is based on the City’s current operating budget for the utility, discussions with City staff, and related information such as debt service schedules and capital improvement plans. This financial plan addresses four primary objectives:
 Meeting Operating Costs: The wastewater utility must generate enough revenue to cover the expenses of wastewater operations, including administration, maintenance, and the collection system.
 Meeting Capital Improvement Costs: The wastewater utility plans to adequately fund necessary capital improvements, which assumes roughly $10 million in planned capital improvements for the current fiscal year through the end of FY 2027/28.
 Maintaining Adequate Bond Coverage: The City is required by its bond covenants to maintain a debt service coverage ratio of at least 1.20 for the outstanding debt obligations. This analysis assumes that the City will be cash funding the planned capital expenses. It is projected that, with the recommended rate increases, the City will meet the 1.20 debt coverage ratio for all existing and anticipated debt through Fiscal Year 2027/28.
 Maintaining Reserve Funds: Implementing annual rate increases builds target reserve fund levels to appropriate levels. Primarily to minimize impacts on ratepayers, City staff chose to use the following reserve targets:
 Operating Reserves reserve target is equal to a three-month (or 90-day) cash cushion for normal operations. For Fiscal Year 2023/24, this is estimated to be $731,000. This reserve is intended to preserve financial viability in the event of short-term fluctuations in revenues and/or expenditures, including those due to weather patterns, the natural billing cycle cash flows, variability in volume-based rates, and changes in the age of receivables.  Capital Reserves of 3 percent of net assets serve as a starting point for addressing longerterm capital needs. For Fiscal Year 2023/24, this is estimated to be $1,053,000. If ratepayers can generate this level of revenues, the City will have reserved a partial cash resource that can be applied toward future capital replacement and rehabilitation needs.  System Reinvestment Reserve of $300,000 annually for any unplanned maintenance the City may occur.

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City of Grass Valley
Water and Wastewater Rate Study Report 18
 Emergency Reserve of $300,00 for any emergency situations.

For FY 2023/24, the net revenue requirement is approximately $3.56 million. Current annual revenues are sufficient to cover annual operating expenditures, debt service payments and contribute to planned capital improvement costs. With the need to maintain healthy reserves, small rate increases are recommended.

Figure summarizes the sources and uses of funds and net revenue requirements for the next five years and includes the recommended annual rate increases. Figure summarizes the utility’s projected reserve funds and target balances.

FIGURE 13. SUMMARY OF WASTEWATER REVENUE REQUIREMENTS
FIGURE 14. SUMMARY OF WASTEWATER RESERVE FUNDS
A summary of the entire 10-year financial plan, showing revenue requirements, revenue sources (including rate revenue), and necessary rate increases is presented in Appendix C, along with a summary of the City’s capital improvement program detail.

FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 Sources of Sewer Funds
Rate Revenue Under Current Rates $ 4,750,000 $ 4,750,000 $ 4,750,000 $ 4,750,000 $ 4,750,000 $ 4,750,000 Non-Rate Revenues 255,000 255,000 255,000 255,000 255,000 255,000 Interest Earnings 55,000 110,680 101,992 92,668 82,261 82,166 Total Sources of Funds $ 5,060,000 $ 5,115,680 $ 5,106,992 $ 5,097,668 $ 5,087,261 $ 5,087,166 Uses of Sewer Funds
Operating Expenses $ 2,894,678 $ 2,965,791 $ 3,038,846 $ 3,113,899 $ 3,191,011 $ 3,270,241 Existing Debt Service 1,515,365 966,501 975,570 981,738 371,792 381,451 New Debt Service - - - - - -
Rate Funded Capital Expenses 868,000 - - 215,413 886,287 500,743 Total Use of Funds $ 5,278,043 $ 3,932,292 $ 4,014,416 $ 4,311,050 $ 4,449,089 $ 4,152,435 Surplus (Deficiency) before Rate Increase $ (218,043) $ 1,183,389 $ 1,092,576 $ 786,617 $ 638,172 $ 934,731 Additional Revenue from Rate Increases1 - 71,250 191,900 290,738 391,553 494,384 Surplus (Deficiency) after Rate Increase $ (218,043) $ 1,254,639 $ 1,284,476 $ 1,077,355 $ 1,029,725 $ 1,429,115 Increase in Rate Revenue Needed to Avoid Deficit 0.00% 2.00% 2.00% 2.00% 2.00% 2.00% Cumulative Increases 0.00% 2.00% 4.04% 6.12% 8.24% 10.41% Net Revenue Requirement2
$ 4,968,043 $ 3,566,611 $ 3,657,424 $ 3,963,383 $ 4,111,828 $ 3,815,269

1. Assumes new rates are implemented October 1, 2023.

2. Total Use of Funds less non-rate revenues and interest earnings. This is the annual amount needed from rates.

Summary of Sources and Uses of Funds and
Net Revenue Requirements
Prop 218 Rate Period
FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 Sewer Operating Reserve Fund
Ending Balance $ 713,756 $ 731,291 $ 749,304 $ 767,811 $ 786,825 $ 806,361 Recommended Minimum Target 713,756 731,291 749,304 767,811 786,825 806,361 Working Capital Reserve Fund
Ending Balance $ 3,736,807 $ 3,252,158 $ 2,732,820 $ 2,154,849 $ 2,130,711 $ 2,540,579 Recommended Minimum Target 1,033,000 1,053,000 1,074,000 1,096,000 1,120,000 1,131,000 System Reinvestment Reserve Fund
Ending Balance $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 Recommended Minimum Target 300,000 300,000 300,000 300,000 300,000 300,000 Emergency Reserve Fund
Ending Balance $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 Recommended Minimum Target 300,000 300,000 300,000 300,000 300,000 300,000 Total Ending Balance (Unrestricted) $ 5,950,563 $ 5,483,449 $ 4,982,125 $ 4,422,660 $ 4,417,535 $ 4,846,940 Recommended Min. Target (Unrestricted) $ 2,346,756 $ 2,384,291 $ 2,423,304 $ 2,463,811 $ 2,506,825 $ 2,537,361 Beginning Reserve Fund Balances and
Recommended Reserve Targets
Prop 218 Rate Period

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Water and Wastewater Rate Study Report 19
Cost of Service Analysis – Wastewater
The wastewater cost-of-service analysis is where annual revenue requirements are fairly and equitably allocated to customer classes. In contrast to the City’s water customer classes, the wastewater customer classes are represented by type of customer: residential, multi-family, mobile home, and commercial.

The key factors used in the wastewater cost-of-service analysis include the estimated effluent (flow) going to the wastewater treatment plant, the effluent strengths (BOD and TSS), and customer-related costs (e.g., billing and administrative costs). Actual wastewater flow data from 2020 was used.

Figure shows how the volume allocation factors were developed, which are the percentages of annual consumption and estimated flow by various types of customers.

FIGURE 15. SUMMARY OF ESTIMATED FLOW TO TREATMENT PLANT Customer Class Effluent Strengths – Effluent strength factors for individual customer classes are estimated using the general industry guidelines6. The estimated effluent strengths by customer class are described below.
 Residential customers, including single-family, multi-family and mobile homes, are estimated to have BOD and TSS strength factors of 175 mg/l.

6 The State Water Resources Control Council (SWRCB) Revenue Program Guidelines, Appendix G, page G-21 “Commercial User Strength Characteristics,” were used for this purpose.

Development of the VOLUME Allocation Factor1
Customer Class Number
of Accounts
June 21-
Jan 22
Consumption
(Tgal)
Annualized
Consumption
(Tgal)
Adjusted
Annual
Volume2
(Tgal)
Percentage
of Volume
Single Family/Duplex 3,406 151,086 226,630 223,558 46.81% Multi Family 207 26,633 96,496 95,188 19.93%
Mobile Home 2 23 78 77 0.02%
Commercial
Class A Usage3562 68,599 102,899 101,504 21.25%
Class B Usage414 20,468 30,702 30,285 6.34%
Class C Usage559 10,919 16,378 16,156 3.38%
Class D Usage633 6,768 10,152 10,015 2.10%
GV FLAT 37 558 838 826 0.17%
NID FLAT 51 0 0 0 0.00%
Total 4,371 285,055 484,172 477,610 100.00%
477,610 Flow (Tgal/yr.)

0.99 Flow Adj. Factor

1. Source files for accounts: Billed Consumption Excel Export_manipulated.xlsx

2. Adjusted annual volume based on wastewater treatment plant influent data for 2020 flow.

Source file: Annual Flow totals.xlsx

3. Standard strength commercial customers include general, theaters, laundries, fairgrounds & dumping at WWTP.

4. Moderate strength commercial customers include hotels & motels.

5. High strength commercial customers include restaurants.

6. Class D commercial customers include schools.

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City of Grass Valley
Water and Wastewater Rate Study Report 20
 Commercial customers have strength factors ranging from lower to higher than residential users, reflecting four strength-related classes (A-, B-, C- and D-strength users).

Figure summarizes the strength characteristics and allocation percentages of the utility’s wastewater customer classes.

FIGURE 16. SUMMARY OF FLOW AND STRENGTH (BOD & TSS) CHARACTERISTICS BY CUSTOMER CLASS Figure compares the total number of accounts and living units or EDUs (depending on how customers are billed) by customer class. Figure then summarizes the total rate revenue requirements by customer class resulting from the cost-of-service cost allocation process. Cost classification components include volume, strength-related (BOD and TSS) and customer-related costs and are represented both as a dollar amount and as a percentage of total net revenue requirements.

Development of the STRENGTH Allocation Factor
Average
Strength
Factor3
(mg/l)
Calculated
BOD
(lbs./yr.)
Percent of
Total
Average
Strength
Factor3
(mg/l)
Calculated
TSS
(lbs./yr.)
Percent of
Total
Single Family/Duplex 223,558 175 326,283 40.8% 175 326,283 50.0% Multi Family 95,188 175 138,926 17.4% 175 138,926 21.3% Mobile Home 77 175 113 0.0% 175 113 0.0%
Commercial
Class A Usage4101,504 130 110,051 13.8% 80 67,724 10.4% Class B Usage530,285 310 78,300 9.8% 120 30,310 4.6%
Class C Usage616,156 1,000 134,742 16.9% 600 80,845 12.4% Class D Usage710,015 130 10,858 1.4% 100 8,352 1.3%
Total 476,784 799,274 100.0% 652,553 100.0%

3. Typical strength factors for BOD and TSS are from the State Water Resources Control Board Revenue Program Guidelines, Appendix G

4. Standard strength commercial customers include general, theaters, laundries, fairgrounds & dumping at WWTP.

5. Moderate strength commercial customers include hotels & motels.

6. High strength commercial customers include restaurants.

7. Class D commercial customers include schools.

Total Suspended Solids (TSS)
Adjusted
Annual Flow
(Tgal)
Customer Class
Biochemical Oxygen Demand (BOD)

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City of Grass Valley
Water and Wastewater Rate Study Report 21
FIGURE 17. SUMMARY OF WASTEWATER CUSTOMER ACCOUNTS AND EDU’S FIGURE 18. SUMMARY OF ADJUSTED RATE REVENUE REQUIREMENTS BY CUSTOMER CLASS As shown in Figure , the total rate revenue expected to be collected in FY 2023/24 would be approximately $4.85 million. The cost allocation factors shown in Figure through Figure are used to calculate the amount of this revenue collected from fixed charges and volumetric rates.

How these costs are then collected from fixed and volumetric charges within each customer class is part of the rate design analysis, the third study component previously shown in Figure .

Development of the CUSTOMER Allocation Factor
Customer Class
Number
of Accounts1
Percentage
of Accounts
Number
of EDUs1
Percentage
of Units
Single Family/Duplex 3,406 77.9% 3,542 46.9%
Multi Family 207 4.7% 2,465 32.7%
Mobile Home 2 0.0% 2 0.0%
Commercial
Class A 562 12.9% 1,015 13.4%
Class B 14 0.3% 223 3.0%
Class C 59 1.3% 98 1.3%
Class D 33 0.8% 35 0.5%
GV FLAT 37 0.8% 59 0.8%
NID FLAT 51 1.2% 109 1.4%
Total 4,371 100% 7,548 100%

1. Source files for accounts: Billed Consumption Excel Export_manipulated.xlsx EDU - Equivalent Dwelling Unit

BOD TSS
Net Revenue Requirements 1
$ 1,797,892 $ 967,892 $ 967,892 $ 1,111,957 $ 4,845,633 --

37.1% 20.0% 20.0% 22.9% 100.0%
Single Family/Duplex 841,552 395,117 483,956 521,779 2,242,404 46.3% Multi Family 358,320 168,235 206,061 363,124 1,095,740 22.6% Mobile Home 291 136 167 295 889 0.0%
Commercial -
Class A Usage2382,098 133,268 100,450 149,522 765,338 15.8% Class B Usage3114,005 94,819 44,957 32,851 286,631 5.9% Class C Usage460,817 163,168 119,913 14,437 358,335 7.4% Class D Usage537,698 13,148 12,388 5,156 68,391 1.4%
GV FLAT 3,110 - - 8,737 11,847 0.2%
NID FLAT - - - 16,057 16,057 0.3%
Total $ 1,797,892 $ 967,892 $ 967,892 $ 1,111,957 $ 4,845,633 100%

1. Revenue requirement for each customer class is determined by multiplying the revenue requirement from each cost classification by the allocation factors for each customer class.

2. Standard strength commercial customers include general, theaters, laundries, fairgrounds & dumping at WWTP.

3. Moderate strength commercial customers include hotels & motels.

4. High strength commercial customers include restaurants.

5. Class D commercial customers include schools.

Customer Class
% of COS
Revenue
Req't. Volume Treatment Customer
Related
Cost Classification Components Cost-of-Service
Revenue Req't.

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Water and Wastewater Rate Study Report 22
Current vs. Proposed Wastewater Rates
Currently, the City’s wastewater rates consist of a fixed monthly account charge for all customers, and a volumetric rate for commercial customers only (based on commercial class). The proposed rates collect 17 percent of revenue requirements from volumetric rates (commercial only) and 83 percent from fixed charges.

Figure shows the current and proposed wastewater rates through FY 2027/28.

FIGURE 19. CURRENT AND PROPOSED WASTEWATER RATES

SINGLE-FAMILY WASTEWATER CUSTOMERS
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
FIXED MONTHLY CHARGES (per unit)
Single Family/Duplex $55.00 $52.76 $53.82 $54.90 $56.00 $57.12 Multi Family $43.19 $37.04 $37.78 $38.54 $39.31 $40.10
Mobile Home $31.66 $37.04 $37.78 $38.54 $39.31 $40.10
Commercial $21.73 $32.62 $33.28 $33.95 $34.63 $35.32
NON-RESIDENTIAL VOLUMETRIC CHARGES PER TGAL 1
Commercial
Class A Usage2
$4.43 $4.52 $4.61 $4.70 $4.79 $4.89
Class B Usage3
$5.34 $5.68 $5.79 $5.91 $6.03 $6.15
Class C Usage4
$9.42 $13.31 $13.58 $13.85 $14.13 $14.41
Class D Usage5
$3.96 $4.10 $4.18 $4.26 $4.35 $4.44

1. Tgal = thousand gallon, or 1,000 gallons

2. Standard strength commercial customers include general, theaters, laundries, fairgrounds & dumping at WWTP.

3. Moderate strength commercial customers include hotels & motels.

4. High strength commercial customers include restaurants.

5. Class D commercial customers include schools.

Sewer Rate Schedule Current
Rates
Proposed Sewer Rates

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Water and Wastewater Rate Study Report 23
Figure compares typical single-family monthly wastewater bills in adjusted rate plan.

Figure compares typical single-family monthly wastewater bills with other communities.

Figure 22 compares total water and wastewater bills for single-family monthly customers with other communities.

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Water and Wastewater Rate Study Report 24
FIGURE 20. MONTHLY SINGLE-FAMILY WASTEWATER BILL COMPARISON

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Water and Wastewater Rate Study Report 25
FIGURE 21. MONTHLY SINGLE-FAMILY WASTEWATER BILL COMPARISON WITH OTHER COMMUNITIES FIGURE 22. MONTHLY SINGLE-FAMILY WASTEWATER BILL COMPARISON WITH OTHER COMMUNITIES

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Water and Wastewater Rate Study Report 26

COMMERCIAL WASTEWATER CUSTOMERS
Figure compares typical class A-strength commercial monthly wastewater bills in year one of the adjusted rate plan, assuming the average 9 hcf monthly consumption.

FIGURE 23. MONTHLY CLASS A-STRENGTH COMMERCIAL WASTEWATER BILL COMPARISON

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City of Grass Valley
Water and Wastewater Rate Study Report 27
Section 5. RECOMMENDATIONS AND NEXT STEPS
Consultant Recommendations
This rate study reflects input from City staff and the City Council and is intended to comply with general industry standards and meet the requirements of Proposition 218. Public hearings and protest balloting requirements. Below are the next steps required to complete the adoption and implementation requirements. As a part of this process, NBS recommends the City take the following actions:
 Implement Recommended Levels of Rate Increases and Proposed Rates: Based on successfully meeting the Proposition 218 balloting requirements, the City Council should proceed with implementing the rate increases and rate structures recommended in this report for both utilities for the next five years. These rate increases are necessary to ensure the continued financial health of the City’s water and wastewater utilities, although maintaining the financial health of the water and wastewater utilities will be an ongoing process.
 Adopt Reserve Fund Targets: NBS recommends the City Council adopt and strive to meet the recommended reserve fund targets described in this report for each utility. The City should periodically evaluate reserve fund levels with the intent of achieving long-term goals.

Next Steps

ANNUALLY REVIEW RATES AND REVENUE
Any time an agency adopts new utility rates, particularly when facing significant capital costs and recent unforeseen expenditures, those new rates should be closely monitored over the next several years to ensure the revenue generated is sufficient to meet the annual revenue requirements. Changing economic and drought-related consumption patterns underscore the need for this review, as well as potential and unseen changing revenue requirements, particularly those related to capital improvement and repair and replacement costs that can significantly affect annual cash flows.

PRINCIPAL ASSUMPTIONS AND CONSIDERATIONS
In preparing this report and the recommendations included herein, NBS has relied on a number of principal assumptions and considerations with regard to financial matters, including the City’s utility budgets, capital improvement plans, the number of customer accounts, water consumption records, and other conditions and events projected to occur in the future. This information and these assumptions were provided by sources we believe to be reliable, although NBS has not independently verified this data.

While we believe NBS’ use of such information and assumptions is reasonable for the purpose of this report and its recommendations, some assumptions will invariably not materialize as stated herein or may vary significantly due to unanticipated events and circumstances. Therefore, the actual results can be expected to vary from those projected to the extent that actual future conditions differ from those assumed by us or provided to us by others.

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Water and Wastewater Rate Study Report 28
Section 6. APPENDIX A - ABBREVIATIONS &
ACRONYMS7
AAF
AF
Alt.

Avg.

AWWA
BMP
BOD
CA
CAP
CCF
CCI
COD
COM
Comm.

COS
COSA
CPI
CIP
DU
Excl.

ENR
EDU
Exp.

FP
FY
FY 2022/23
GPD
GPM
HCF
Ind.

Irr.

LAIF
Lbs.

MFR
MGD
MG/L
Mo.

Muni.

NH3
NPV
N/A
O&M
Prop 13
Prop 218
Req’t
Res.

7 This appendix identifies abbreviations and acronyms that may be used in this report. This appendix has not been viewed, arranged, or edited by an attorney, nor should it be relied on as legal advice. The intent of this appendix is to support the recognition and analysis of this report. Any questions regarding clarification of this document should be directed to staff or an attorney specializing in this particular subject matter.

Average Annual Flow
Acre Foot, equal to 435.6 HCF/CCF or 325,851 gallons
Alternative
Average
American Water Works Association
Best Management Practice
Biochemical Oxygen Demand
Customer
Capacity
Hundred Cubic Feet (same as HCF); equal to 748 gallons
Construction Cost Index
Chemical Oxygen Demand
Commodity
Commercial
Cost of Service
Cost of Service Analysis
Consumer Price Index
Capital Improvement Program
Dwelling Unit
Exclude
Engineering News Record
Equivalent Dwelling Unit
Expense
Fire Protection
Fiscal Year (e.g., July 1st to June 30th)
July 1, 2022 through June 30, 2023
Gallons per Day
Gallons per Minute
Hundred Cubic Feet; equal to 748 gallons or 1 CCF
Industrial
Irrigation
Local Agency Investment Fund
Pounds
Multi-Family Residential
Million Gallons per Day
Milligrams per Liter
Month
Municipal
Ammonia
Net Present Value
Not Available or Not Applicable
Operational & Maintenance Expenses
Proposition 13 (1978) – Article XIIIA of the California Constitution which limits taxes on real property to 1% of the full cash value of such property.

Proposition 218 (1996) – State Constitutional amendment expanded restrictions of local government revenue collections.

Requirement
Residential

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Water and Wastewater Rate Study Report 29
Appendix A, continued
Rev.

RTS
R&R
SFR
SRF Loan
SWRCB

TSS / SS
V. / Vs. /vs.

WWTP
Revenue
Readiness-to-Serve
Rehabilitation & Replacement
Single Family Residential
State Revolving Fund Loan
State Water Resources Control Council
Total Suspended Solids
Versus
Wastewater Treatment Plant

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Water and Wastewater Rate Study Report 30
Section 7. APPENDIX B – WATER RATE SUMMARY
TABLES

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Water and Wastewater Rate Study Report 31
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Water and Wastewater Rate Study Report 32
Section 8. APPENDIX C – WASTEWATER RATE

SUMMARY TABLES

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City of Grass Valley Phone: PHONE

NOTICE OF PUBLIC HEARING

PROPOSED WATER & SEWER RATE INCREASE
DATE
City of Grass Valley
City Council Chambers

ADDRESS
Notice is hereby given that at the date, time and place shown above, the Grass Valley City Council will hold a public hearing to consider proposed water & sewer rate increases for the next five (5) years (Fiscal Years 2024 through 2028). The City charges these rates to fund its costs to provide service collection and treatment, including operating costs and ongoing capital improvements. Increases to water & sewer rates will enable the City to continue delivering safe and reliable service.

The purpose of this notice is to describe the proposed rate increases and notify you of the public hearing.

All water customers currently pay a monthly fixed service charge by meter size and a volumetric rate ($/hcf) 1 based upon
the monthly amount of water used. These charges are included in the rate table shown below.

All sewer customers currently pay a monthly fixed service charge by equivalent dwelling unit (EDU) and non-residential customers also pay a volumetric rate ($/hcf)2 based upon the average monthly amount of water used in winter months (typically when irrigation flow is at the lowest). These charges are included in the rate table shown below.

1 hcf means “one hundred cubic feet” and amounts to 748 gallons of water. 2 hcf means “one hundred cubic feet” and amounts to 748 gallons of water.

FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Fixed Meter Charges
Monthly Fixed Service Charges:
5/8 inch $26.00 $30.06 $32.16 $34.41 $36.82 $39.40
3/4 inch $39.00 $37.09 $39.69 $42.47 $45.44 $48.62
1 inch $65.00 $51.14 $54.72 $58.55 $62.65 $67.04

1.5 inch $130.00 $86.29 $92.33 $98.79 $105.71 $113.11
2 inch $208.00 $128.46 $137.45 $147.07 $157.36 $168.38
3 inch $390.00 $578.30 $618.78 $662.09 $708.44 $758.03
4 inch $650.00 $894.60 $957.22 $1,024.23 $1,095.93 $1,172.65 6 inch $1,300.00 $1,773.19 $1,897.31 $2,030.12 $2,172.23 $2,324.29 8 inch $2,080.00 $2,827.51 $3,025.44 $3,237.22 $3,463.83 $3,706.30 Commodity Charges
Rate per Tgal of Water Consumed:

Residential Uniform Rate $3.75 $4.17 $4.46 $4.77 $5.10 $5.46 Non-Residential Uniform Rate $4.48 $4.17 $4.46 $4.77 $5.10 $5.46 Temporary Meter Uniform Rate $4.48 $4.17 $4.46 $4.77 $5.10 $5.46 Water Rate Schedule Current
Rates
Proposed Rates

Item # 14.

City of Grass Valley Phone: PHONE
If approved by the City Council, rates will change starting on October 1, 2023, then July 1 subsequently each year after to the amounts shown in this table.

Written protests from sewer customers or property owners may be submitted in writing any time before the closing of the City Council public hearing on DATE. Protests may be mailed to the City, hand-delivered to the City Clerk’s Office, or brought in-person to the City Council Public Hearing. Protests will be accepted and tabulated pursuant to Proposition 218 guidelines. Pursuant to California Government Code Section 53755(a)(3)(b), only one written protest will be counted per parcel. If protests are received from property owners or customers with respect to a majority of the affected parcels (50 percent plus one), then the Council cannot approve the proposed rate increases.

To be included in the protest count a protest must:
 Be signed by the property owner or customer of record;  Include the address of the owner or customer submitting the protest;  Be received by the City prior to the close of the City Council public hearing on June 13, 2023;  State that it is protesting the proposed water & sewer rate increase; Address written protests as follows: City of Grass Valley – Office of the City Clerk RE: Written Protest – Water & Sewer Rates

ADDRESS
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
FIXED MONTHLY CHARGES (per unit)
Single Family/Duplex $55.00 $52.76 $53.82 $54.90 $56.00 $57.12 Multi Family $43.19 $37.04 $37.78 $38.54 $39.31 $40.10
Mobile Home $31.66 $37.04 $37.78 $38.54 $39.31 $40.10
Commercial $21.73 $32.62 $33.28 $33.95 $34.63 $35.32
NON-RESIDENTIAL VOLUMETRIC CHARGES PER TGAL 1
Commercial
Class A Usage2
$4.43 $4.52 $4.61 $4.70 $4.79 $4.89
Class B Usage3
$5.34 $5.68 $5.79 $5.91 $6.03 $6.15
Class C Usage4
$9.42 $13.31 $13.58 $13.85 $14.13 $14.41
Class D Usage5
$3.96 $4.10 $4.18 $4.26 $4.35 $4.44

1. Tgal = thousand gallon, or 1,000 gallons

2. Standard strength commercial customers include general, theaters, laundries, fairgrounds & dumping at WWTP.

3. Moderate strength commercial customers include hotels & motels.

4. High strength commercial customers include restaurants.

5. Class D commercial customers include schools.

Sewer Rate Schedule Current
Rates
Proposed Sewer Rates

Item # 14.