CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
2/15/2022
1 SUBJECT:
A Resolution of the City Council of the City of Pacifica Stating Its Intention to Hold a Public Hearing and Consider Updating the City’s Sewer Service Charges Beginning Tax Year 2022- 2023 for a 5-year period from FY 2022/23 to FY 2026/27 and Provide Direction on Sewer Capacity Fees Related to Accessory Dwelling Units.
RECOMMENDED ACTION:
Move to Adopt a Resolution of the City Council of the City of Pacifica Stating Its Intention to Hold a Public Hearing and Consider Updating the City’s Sewer Service Charges Beginning Tax Year 2022-2023 for a 5-year period from FY 2022/23 to FY 2026/27 and Provide Direction on Sewer Capacity Fees Related to Accessory Dwelling Units.
STAFF CONTACT:
Lisa Petersen, Director of Public Works
(650) 738-3767
[email protected]
Yulia Carter, Chief Financial Sustainability Officer
(650) 501-6004
[email protected]
Maria Aguilar, Plant Manager
(650) 738-4660
[email protected]
BACKGROUND/DISCUSSION:
Every five years, the City completes a wastewater rate study to determine the rate increases that are necessary to meet the Wastewater Division’s (Wastewater) operating costs, projected Capital Improvement Program (CIP) and expected yearly consumer price index increases. The previous Council adoption of a resolution stating the intention to consider updating the City’s sewer charges was in March 2017 with final rate adoption in May 2017. This past year, as in 2017, the City completed a sewer rate study by Bartle Wells Associates (“BWA”), who specializes in wastewater financing. The sewer rate study focuses on the financial need for two major components of the City’s wastewater system, which are noted below:
1) The Collection System that is comprised of the sewer mains, collector mains, and trunk lines and the pump stations that carry the wastewater to the sewage treatment plant; and 2) The Calera Creek Water Recycling Plant (“the Plant”) that was designed in 1991 and became operational in 2000. The Plant is designed to treat an average daily dry weather design Pacifica City Council 2
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flow of 4 million gallons per day (MGD) and a peak hourly wet weather discharge capacity of 20 MGD to Calera Creek. It employs an innovative sequencing batch reactor (SBR) that combine the basins for aeration and clarification, which are separate basins at conventional wastewater treatment plants. Moreover, the Plant was one of the first fully automated plants in the San Francisco Bay Area designed for nutrient removal and helped pioneer the use of ultraviolet (UV) disinfection for wastewater effluent in California. Furthermore, it was also one of the first plants using ATAD technology (autothermal thermophilic aerobic digesters) for the generation of Class A sludge in California.
Both the Collection System and the Plant are supported by rate payer revenue. Due to the age of the Plant and Collection System infrastructure (which is exposed to a harsh coastal environment), stringent regulatory requirements and vendor phase-out of parts, the City’s sewer treatment infrastructure is faced with the monetary need for capital replacement and maintenance. Therefore, sewer rate increases are proposed to provide adequate funding for capital replacement and addressing costs related to consumer price index (CPI) increases and operation needs.
The Proposed Rates
The proposed rate revisions and the calculation methodology that supports the rates are set forth in a wastewater rate study conducted by BWA (See Attachments 1, 2 and 7). A rate increase of 3.5%/year is proposed to cover Wastewater operations, maintenance, capital projects, consumer price index (CPI) increases and debt service. Rates are projected for a 10- year period for forecasting purposes from FY2022/23 to FY2031/32; however, the rate increase approval is for a 5-year period from FY2022/23 to FY2026/27 Residential Rates
Residential customers pay a rate per hundred cubic feet (hcf) of water consumption subject to a minimum charge.
The method for estimating water consumption for single-family and multi-family residences is to multiply total water consumption during the billing year by 90% (0.90).
Generally, the water consumption estimate for a user is the user’s total water consumption for the six (6) bi-monthly water billing periods ending with the billing period for February of the calendar year during which the charges will be levied. This twelve (12) month period is known as the “billing year.”
Commercial Rates
Commercial customers pay a rate per hundred cubic feet (hcf) of water consumption multiplied by a strength factor based on the customer classification. Rates are subject to a minimum charge.
The “billing year” for commercial rates is the same as for residential rates. However, schools with mixed water use (drinking water and irrigation) may apply to have their flow estimate calculated as six (6) times the average consumption of the following bimonthly periods: (i) March and April, (ii) May and June, (iii) ½ billed during November and December, and (iv) January and February.
Why are the sewer rates increasing?
The proposed rate increase is based on anticipated expenditures for the operation, maintenance, repair, and management of the entire wastewater system as well as the Pacifica City Council 3
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construction of capital projects and estimated CPI. In addition, staff is proposing three key changes to the Wastewater program related to projections of the developed FY2022/23 to FY2031/32 10-year Capital Improvement Program (CIP). These changes include the following:
• Increase the amount of Collection System repair to address stormwater entering the sewer collection piping through age-related problem connections/cracks (infiltration and inflow) by more than 2x the amount completed in the previous 10 years. • Increase the amount of Plant equipment replacement by 4x the amount completed in the previous 10 years.
• Augment the Wastewater Engineering staff by reclassifying one position to a higher-level manager position and adding one position to deliver the increased proposed CIP.
The total cost of the proposed Wastewater CIP over the 10-year period will be approximately $120M. Staff believes the increases to the CIP is necessary due to age deterioration of the wastewater infrastructure in both the Collections System and at the Plant. Engineering augmentation, which will be discussed in more detail below, would be necessary to deliver this larger CIP due to the increased engineering workload.
For fiscal year 2021-2022, $14,000,000 has been budgeted to ensure continued smooth operations of the Plant and Collection System to include plant operations and maintenance, collection system operations and maintenance, CPI increases and debt service.
How can the City save money on Wastewater operation and maintenance costs? The City’s Wastewater Capital Improvement Program is geared towards reducing operation and maintenance costs at the Plant and Collection System. For example, additional repairs to the City’s Collection System to reduce infiltration and inflow into the system can prevent the Plant from treating unnecessary sewer flow. Averaging low rain and high rain years, it is estimated that the City treats 100 million gallons of unnecessary flow from stormwater mixed with sewage each year. The cost of treating this level of extra flow is estimated to be $700,000 per year or more. The proposed CIP projects targeting reduction of I/I will help to minimize this cost.
The Plant also has CIP projects planned to lower costs. The Plant started a project in 2021 to repair and upgrade its existing photovoltaic system with a better system that allows for more energy savings. It is anticipated the cost saving following completion of the photovoltaic project upgrade will be approximately $200,000 per year. Another Plant CIP project that will help save money is the replacement of the aging ultraviolet disinfection system. The new system is anticipated to use about 70% less energy. This, in addition to the realized savings from the new system efficiencies, will allow cost savings in the range of $400,000 per year once the project is complete. More information related to the City’s proposed CIP is provided in the paragraphs below.
Changes to City’s Adopted 5-Year Wastewater CIP FY2021/22 to FY2025/26 As part of the public process related to the City’s proposed update of the City’s sewer service charge, it is important to not only discuss the new 10-year CIP projection from FY2022/23 to FY2031/32, but also to highlight changes that are proposed related to the City’s previously adopted 5-year Wastewater CIP. The previously adopted CIP started in FY2021/22 and projected CIP work through FY 2025/26. The Council adopted the City’s 5-year CIP for FY 2021/22 to 2025/26 in June of 2021 as part of the City’s yearly budget process. As noted above, staff is proposing changes to the CIP, some of which change the previously adopted CIP projections to address the increased infiltration and inflow (I/I) the system is experiencing and the age deterioration of Wastewater infrastructure at both the Plant and Collection System Pacifica City Council 4
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(Attachment 3).
For the Collection System, the following changes to the adopted CIP are proposed that will increase capital project work on the system or reflect increased costs from the previously adopted 5-year CIP:
-FY22 to FY 26: Collection system repairs to address I/I -$6.9M increase -FY22: Linda Mar/Rockaway Pump Stations - $300K increase -FY22: Sharp Park Pump Station - $1M increase
-FY24: Force main Condition Assessment - $75K (new)
-FY25: Relocation of Sewer Mainline SF RV Park - $1.2M increase Changes to the City’s adopted 5-year CIP related to the Plant include moving forward equipment work on the critical path and moving out work that is non-critical. Prioritized projects related to the adopted CIP that increased in cost include the Ultraviolet Disinfection System Upgrade and the SCADA system that are discussed in detail further down in this report. The Vehicle Storage and Office Facility project is proposed to move out to FY2029, as this project is less critical. Moving out the storage/office facility helped to minimize the Plant related cost impacts from the prioritized projects related to the adopted Wastewater 5-Year CIP allowing for a minimal cost change from the adopted CIP (+$80K) related to the Plant.
Proposed 10-Year FY2022/23 to FY2031/32 Wastewater CIP Recommendations As noted, part of the rate assessment is related to the projection of the developed FY2022/23 to FY2031/32 10-year Capital Improvement Program that is provided in Attachment 3. This developed 10-year CIP includes the recommendation for City’s next FY 2022/23 to FY 2026/27 5-year CIP (to be brought to Council for approval during the upcoming budget discussions) and the projection of the CIP for another five-year period from FY 2027/28 to FY 2031/32. The below discussion highlights major projects for the Collection System and Plant that are proposed for the upcoming FY 2022/23 to FY 2026/27 5-year CIP. The proposed 5-year CIP starting in FY 2022/23 will increase the amount of CIP work from the previously adopted CIP by approximately $25M. $15M of this is allocated for upgrades to the Collection System and Plant and $10M for protecting the sewer infrastructure in Sharp Park. In addition to the discussion of the proposed upcoming 5-year CIP, the information below provides a general discussion of projects forecasted in the out years through FY 2031/32 Collection System Capital Projects
The City’s wastewater collection system is aging. Sewer age ranges from sewers constructed in the 1940s and 1950s, to more recently repaired and rehabilitated sewers in locations like the Pedro Point area. The three main pump stations (Linda Mar, Rockaway, and Sharp Park) are also aging. To address aging assets and improve system operation, the City constructed the Wet Weather Equalization Basin as well as continued the lateral grants and ongoing sewer cleaning programs. These improvements and programs also comply with the Cease and Desist Order (CDO) issued to the City by the Regional Water Quality Control Board (RWQCB) in May of 2011, and the Consent Decree (CD) entered into with the RWQCB in June 2011.
The City recently completed an assessment of the pump stations and updated the City’s Collection System Master Plan (Master Plan). Based on this information and the recent storm events that have highlighted the impact of infiltration/inflow (I/I) into the City’s Collection System, a more robust rehabilitation program is recommended for the upcoming years related to the Collection System. In addition, the Master Plan, which was approved by Council in October 2021, noted that the critical Beach Boulevard gravity sewer main line and Sharp Park pump Pacifica City Council 5
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station are vulnerable assets from sea level rise/climate change without protection. The Master Plan stated that the City’s Wastewater Division should assist the City-led protection efforts for this area discussed in the Beach Boulevard Infrastructure Resiliency Project’s (BBIRP) MultiHazard Risk Assessment (MHRA) and noted supporting the BBIRP would be a cost-effective way to protect the sewer infrastructure in this area of Sharp Park. In line with this discussion, the rate study includes the $40M identified in the BBIRP MHRA as the cost of relocating this infrastructure. This funding would be used to support the BBIRP that will protect the sewer infrastructure in this area.
For the proposed 5-Year CIP from FY2022/23 to FY2026/27, which will be recommended for Council approval during the upcoming budget process, staff have estimated the total cost of the Collection System capital projects, including $10M to support the BBIRP, is $35M. The following are the major projects that need to be completed during this period:
• Collection System I/I Repairs and Rehabilitation
Recent storm water events in October 2021 have brought to light the need to expedite sewer repair and rehabilitation of aging sewers to confront the detrimental impacts of extreme storm events. Extreme storm events may become more frequent which would be in line with the trends attributed to climate change. To meet this challenge, the City is proposing a robust sewer repair and rehabilitation program over the next ten years. For the proposed 5-year FY2022/23 to FY2026/27 CIP, the program will focus in the Lower Linda Mar area (sewers constructed in the 1950s) and East Rockaway area (sewers constructed in the 1940s). Implementing this program will reduce rainfall related I/I into the sewers thereby reducing the wet weather impacts on downstream equipment at the Linda Mar and Rockaway Pump Stations and the Plant.
• Pump Station (PS) Repair and Rehabilitation
Currently, the City is beginning a project at the Linda Mar Pump Station to replace aging electrical systems. The program also includes pump station improvements proposed for the three main pump stations (Linda Mar, Rockaway, and Sharp Park). For FY2022/23 to FY2026/27, the program will focus on the electric improvement completion, pump replacement and screen rebuild at the Linda Mar PS and odor control, mainline relocation, wet well improvements and screen rebuild at the Sharp Park PS, with screen rebuild at the Rockaway PS.
Forecasts for Collection System improvements in future years, from FY2027/28 to FY2031/32, are projected to be $48M and generally include sewer repair and rehabilitation of Vallemar and Fairway Park to address I/I and support of the BBIRP to protect the Sharp Park sewer infrastructure. During the FY2022/23 to FY2031/32 10-year CIP, Collection System pipeline I/I repair and rehabilitation are projected to more than double from the previous 10-year period.
Wastewater Treatment Plant Capital Projects
The Plant is an aged but well-maintained facility. Most of its major equipment have been around since the beginning of operation and some have been replaced or rebuilt through the years. It has been an on-going process of repairing and replacing pumps, blowers, valves, motors and other mechanical and electrical equipment. Because of the age of the Plant, many of the existing systems have now reached their life cycle and major upgrades are needed. For FY2022/23 to FY2026/27, the total cost of the Plant’s capital projects is projected to be $25M.
The following are the major projects that need to be completed during this 5-year period:
• Ultraviolet Disinfection System Upgrade
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The Plant currently uses Trojan UV4000, a medium- pressure Ultraviolet (UV) radiation lamp system, for disinfection. The system was installed in the year 2000 and the manufacturer will begin discontinuation of replacement parts in the near future. Since the disinfection is the most important process of wastewater treatment, it is imperative that the system be upgraded as soon as possible. A UV System Feasibility Study (Study) was completed in November 2021 to determine the best alternative for a replacement. The new UV system will be energy efficient, reliable, easy to maintain and most of all be able to fit within a limited footprint. The Study identified new complexities of construction that included building temporary disinfection infrastructure, new electrical building and electrical equipment. Due to this and the rising cost of raw materials and labor, the original estimated cost of $4.7 million escalated to $11.4 million based on the Study.
• Plant Supervisory Control and Data Acquisition (SCADA) and Programmable Logic Controller (PLC) Upgrade
In 2019, the City’s consultant, Woodard & Curran, completed an assessment of the Plant’s SCADA system which concluded that much of the system components are no longer supported by the manufacture and at risk of potential failure without available replacement parts. Additionally, software versions are out of date, which could present risks related to cybersecurity, specifically exploitation of vulnerabilities in older software revisions. This project will replace the current PLC (to address the issue of manufacturer parts phase-out) to the Control Logix platform, upgrade the existing computers and HMI software to the latest Microsoft platform, install a secure remote access system with hardware and software, install appropriate SCADA and Internet Cybersecurity equipment and standards, and complete other improvements needed. This will be a multi-phased project to ensure no disruption in the Plant’s operation. • Plant Photovoltaic System Improvement
The City of Pacifica commissioned the Plant 350 kWp Solar Photovoltaic Project in late 2006. In 2017, the inverter for the fixed solar panel array failed and became nonoperational. In 2021, Panasonic paid the City to buy out the remaining 10-year warranty for the solar modules. Also in 2021, the construction to replace the existing 100 kWp fixed array with 132 kWp system commenced. This project is expected to be completed by Spring 2022. The 2nd phase of the project will replace the remaining 200 kWp system with a system allowing for 30% more power output and is planned for FY2024/25. • Plant Headworks Feasibility and Improvements
A plant’s headworks plays a crucial role in the pretreatment of influent for any wastewater treatment facility. It protects the operation of downstream equipment and enhances the efficiency of the overall wastewater treatment process. Because all wastewater debris removal starts at the headworks, proper screening and debris removal is imperative to the entire wastewater system. At the Plant, the headworks consist of an influent channel and mechanical vortex grit removal.
However, because of its age, the influent channel has deteriorated, and the mechanical vortex grit removal has not been performing well due to material build-up in the Sequencing Batch Reactor (SBR) and Autothermal Thermophilic Aerobic Digestion (ATAD) basins requiring costly cleaning activities. This Project will rebuild the influent channel, replace the mechanical vortex grit removal and add bar screening facilities at the Plant to augment the existing screening at the pump stations.
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• Plant Electrical Condition Assessment and Improvements The Plant’s electrical system has been updated as needed but is aging with some existing replacement parts no longer available. This project consists of conducting a condition assessment of the electrical system to identify improvements. Improvements will include replacement of two existing 900 KW emergency generators, upgrade of existing transfer switches, and other electrical improvements.
Forecasts for the Plant’s improvements in future years, from FY2027/28 to FY2031/32, are projected to be $11M and generally include continuation of the Headworks improvements and the Vehicle Storage and Office Facility project. The storage and office facility has been moved further out on the schedule to allow staff to concentrate on more critical projects. During the FY 2022/23 to FY 2031/32 10-year CIP, Plant equipment replacement is projected to increase by 4 times from the previous 10-year period.
Wastewater Engineering Staff Augmentation
Currently, Wastewater only has one engineer, a Senior Civil Engineer who administers both the Collection System’s and the Plant’s capital projects. To deliver the needed Wastewater CIP for both the Collection System and Plant, which is averaging approximately $60M over each 5-year period of the forecasted 10-year CIP, an augmentation to Wastewater engineering is necessary.
The proposed 3.5% increase to the sewer rates (discussed below) includes this augmentation.
The restructuring would begin in FY 2022/23 and includes reclassifying the Senior Civil Engineer position to a Wastewater Engineering Manager (Manager) position. Additionally, one (1) new staff position is proposed for a Wastewater Assistant/Associate Engineer. Along with managing the new Wastewater Assistant/Associate Engineer position, the Manager will hire and manage multiple consultant program/construction managers for the proposed increased CIP work and the Manager position will also take on their own project management work. Staff will recommend these staffing changes (reclassifying Senior Civil Engineer to Wastewater Engineering Manager and adding a Wastewater Assistant/Associate Engineer) to the Council during the budget discussion for FY2022/23. The fiscal impact for reclassifying the Senior Civil Engineer to a Wastewater Engineering Manager and adding a full-time Wastewater Assistant/Associate Engineer is estimated to be $350,000 annually, at top step. This cost is included in the rate increase.
Proposed Rates
Staff is recommending an increase to the City sewer rates over the next five years (see Table 1 below and Attachments 1, 2 and 7).
BWA projects 3.5% per year rate increases are required each year for the next 5 years (FY 2022/23 to FY 2026/27). Projections include 0.5% growth estimated based on projected development.
TABLE 1 - SUMMARY OF PROPOSED CHARGES
Current Maximum Proposed Rate*
2022-23 2023-24 2024-25 2025-26 2026-27
Percent Increase 3.5% 3.5% 3.5% 3.5% 3.5%
Rate** $18.8137
3 $19.4722
1 $20.1537
4 $20.8591
2 $21.5891
9 $22.3448
1 Minimum Annual
Rate
$903.06 $934.67 $967.38 $1,001.24 $1,036.28 $1,072.55
** per hundred cubic feet (hcf) or 1 water unit
BWA projects an initial loan of $31.6M is required in FY2022/23 to fund the capital program. An Pacifica City Council 8
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additional $52.4M is estimated to be required in FY2026/27 for three years of capital, primarily to fund the Beach Boulevard Infrastructure Resiliency Project (total est. cost is $40M over four years, beginning in FY2026/27) and other projects. For projection purposes, the loan terms are estimated at 4% interest, 30 years, with 1.5% issuance fees. However, staff will also review other funding options such as the Clean Water State Revolving Fund (CWSRF), Water Infrastructure Finance and Innovation Act (WIFIA) or other loans that can provide lower rates.
Staff will be providing the Council with more information related to loan funding during the City’s upcoming budget review process.
The financial projections are designed to meet a minimum operating reserve target of 90 days and least 1.25x debt service coverage (calculated as net revenues / annual debt service). The City is projected to have very strong debt service coverage of at least 1.43x throughout the projection period.
Rate comparison
The City’s average monthly rate for a single-family home is currently $94.07 (based on 5 water units). The regional average is $96.70, based on BWA’s most recent survey for 2021/22 (See Attachment 4). The proposed 3.5% increase would increase the average monthly rate to $97.36, a $3.29 increase ($39.48 increase over a year).
Rate setting process
The rate setting process follows the Proposition 218 noticing requirements for utilities. All record owners and customers of record will receive a notification in the mail 45 days prior to the sewer rate public hearing, which is scheduled for Monday, April 11, 2022. The City must mail the required notice to all property owners in the City, a copy of which is attached as Attachment
6. A majority protest vote of 50% plus 1 of total parcels subject to the rates would be necessary to prevent the proposed increase. (See Attachments 5 and 6) Capacity Fee Study
BWA has also completed a Capacity Fee study for the City (Attachment 8). Capacity fees are the one-time fee property developers pay to connect to the City’s wastewater system. The City’s current fee was adopted in 1974 and has been escalated annually by inflation. The City currently charges $3,825 per single family home, one of the lowest of the surveyed cities in the region (the regional average for BWA’s 2021/22 survey was $10,063.) BWA updated the City’s wastewater capacity fees with the goals of developing fees that recover the full cost of wastewater system infrastructure assets and planned facilities expenditures that benefit new or expanded development to help ensure that growth pays its own way. BWA recommends that the City charge capacity fees based on meter size to reflect difference in wastewater demand between customer classes that have varying meter sizes (increased sizes demanding more water and producing more wastewater). This meter-based capacity fee structure aligns with industry trends in wastewater connection fees and closely resembles North Coast County Water District’s meter-based water capacity fee changes.
Single-Family Home
BWA calculated a wastewater capacity fee of $652.16 per drainage fixture unit. The typical single-family home is estimated to have 19 drainage fixture units. BWA’s developed fee for a single-family home (SFD) is $12,391. While the proposed fee comes in slightly above average for the region, this fee is reasonable compared to the regional average of $10,063 because many of the surveyed agencies have outdated fees that likely would be higher if newly updated.
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Accessory Dwelling Units (ADU)
Similar to many regional agencies, Pacifica currently does not charge sewer capacity fees for accessory dwelling units. To comply with state law, BWA recommends capacity fees be changed on a $/drain fixture unit (SFD are charged per home). BWA conducted a survey of the regional agencies which do charge for accessory dwelling units and found that the average charge for an example 12 fixture unit accessory dwelling is $6,024. Should the City implement the proposed charge for accessory dwelling units, a 12 fixture unit accessory dwelling connection would cost $7,826. While above average for the region, the charge would still be well below the highest of $12,876 charged by Montara WSD and $8,867 by Castro Valley SD.
Although Union Sanitary District and Benicia were on the lower cost end of the survey, both base their costs on square footage. BWA survey assumes that a 12 fixture unit accessory dwelling unit would be equivalent to 500 square feet of floor area to compare square footage charges with fixture unit charges; should the assumed square footage be higher per fixture unit, those agencies shown on the low end of the survey would show a higher cost. Staff is requesting Council provide direction on sewer capacity fees related to Accessory Dwelling Units and if capacity fees should be implemented for ADU’s. Staff will provide a range of options regarding ADU capacity fee implementation during the Council presentation on this item.
To provide notice of the proposed changes to sewer capacity fees, staff will publish a notice of the proposed change 10 days prior to a public hearing on the issue. In addition, staff will notify developers who have requested notification from the City 14 days before the public hearing, as required by state law. Staff will also notify developers on the Active Planning Application List.
Staff anticipates holding the public hearing for the capacity fee changes on April 11, 2022.
Next Steps/Proposed Schedule
Should Council adopt a resolution stating its intention to hold a public hearing and consider updating the City’s sewer service charges beginning tax year 2022-2023 for a 5-year period, the following is the anticipated schedule related to the sewer rate revision and capacity fee (Attachment 5):
• Mailing of Property Owner Notices of Rate Revision - By February 25, 2022 • Advertise Public Hearing for Rate Revision/Capacity Fee - By March 30, 2022 • Public Hearing/1st Reading of Ordinance (Rate Revision/Capacity Fee) - April 11, 2022 • Adoption of Ordinance (Rate Revision/Capacity Fee) - April 25, 2022 ALTERNATIVE ACTION:
The Council may choose not to adopt the Resolution of the City Council of the City of Pacifica Stating Its Intention to Hold a Public Hearing and Consider Updating the City’s Sewer Charges Beginning Tax Year 2022-2023 and instead instruct staff to come back with additional information/changes Council may desire.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
Adoption of the Resolution of the City Council of the City of Pacifica Stating Its Intention to Revise the City’s Sewer Charges Beginning Tax Year 2022-2023 is consistent with the following Council adopted Goals:
· Stewardship of City Infrastructure and Maintaining a Safe Community: This Adoption of the Resolution of the City Council of the City of Pacifica Stating Its Intention to Revise the City’s Sewer Charges Beginning Tax Year 2022-2023 is the first step necessary to ensure sufficient funding to maintain operations and maintenance of sewer collection system, pump stations, and the Calera Creek Water Pacifica City Council 10 February 15, 2022
Recycling Plant.
FISCAL IMPACT:
The fiscal impact for FY2022/23 will be a revenue generation of $18.2M or a 4% increase from the prior year for Sewer Funds 34 and 18. The 4% increase is based on the 3.5% rate payer increase plus an additional 0.5% increase to revenues that is projected to be paid through new development. The increased rates will provide the wastewater program with a total of $98.7 million over the five years to address capital replacement and increased costs.
As noted, the City’s current single-family capacity fees are $3,825 per unit. Updated capacity fees will generate an additional $8,566 per new single-family connection. Based on 0.5% growth per year or 64 connections, the increased fee could generate an additional $548,224 per year.
ORIGINATED BY:
Public Works - Wastewater Division
Finance Department
ATTACHMENT LIST:
Attachment1 - SewerServiceCharges2022-27 (PDF)
Attachment2 - Bill Impacts (PDF)
Attachment3 - CIP (PDF)
Attachment4-Rate Survey (PDF)
Attachment5-Schedule2022 (PDF)
Attachment6-Notice of PublicHearing (PDF)
Attachment7 - Pacifica Wastewater Rates Memo (PDF)
Attachment8 - Pacifica Wastewater Capacity Fee Report (PDF) Pacifica City Council 11 February 15, 2022
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA STATING ITS
INTENTION TO HOLD A PUBLIC HEARING AND CONSIDER UPDATING THE CITY’S SEWER CHARGES BEGINNING TAX YEAR 2022-2027
WHEREAS, the City of Pacifica levies charges for sewer services pursuant to Chapter 6 of Title 6 of the Pacifica Municipal Code and pursuant to Section 5470 et seq. of the California Health & Safety Code; and
WHEREAS, the City periodically reviews the rate of such charges to determine that the charges will fully fund the City’s sewer enterprise and proportionately and fairly allocate the costs of providing sewer service; and
WHEREAS, the City has determined that rate revisions will be required in order to maintain the required level of funding; and
WHEREAS, the City Council desires to initiate proceedings, pursuant to Proposition 218 to revise the charges that will be effective beginning in the 2022-2023 tax year.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PACIFICA THAT:
Section 1. The foregoing recitals are all true and correct.
Section 2. The City Council proposes to schedule a public hearing to consider the imposition of the rate structure shown in Exhibit “A” to this Resolution, which is incorporated herein by reference.
Section 3. The City Council directs staff to schedule a public hearing at which all interested persons shall be permitted to present oral and written testimony with respect to the proposed rate revision. The City Council further directs staff to give notice of the hearing in the manner required by law. The City will accept and tabulate protests against the proposed rate revision pursuant to the procedures set forth in Exhibit “B” to this Resolution, which is incorporated herein by reference.
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• • • • •
PASSED AND ADOPTED at a special meeting of the City Council of the City of Pacifica, California, held on the 15th day of February 2022, by the following vote:
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
Mary Bier, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ ______________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney EXHIBIT “A”
PROPOSED NEW RATE SCHEDULE
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I. Consumption-Based Charge
Annual sewer charges shall be based upon water consumption that is in conformity with the rate measurement formulas set forth in this article and shall be charged at $19.47221 per 100 cubic feet of water consumption, effective July 1, 2022; $20.15374 per 100 cubic feet of water consumption, effective July 1, 2023; $20.85912 per 100 cubic feet of water consumption, effective July 1, 2024; $21.58919 per 100 cubic feet of water consumption, effective July 1, 2025; and $22.34481 per 100 cubic feet of water consumption, effective July 1, 2026.
II. Minimum Rate
Regardless of use, the minimum rate for any user shall be $934.67 per year for FY 2022-23.
The $934.67 minimum rate shall also be the sewer charge applied to new sewer connection permits obtained after July 1 for that particular fiscal year ending June 30, 2023.
Regardless of use, the minimum rate for any user shall be $967.38 per year for FY 2023-24.
The $967.38 minimum rate shall also be the sewer charge applied to new sewer connection permits obtained after July 1 for that particular fiscal year ending June 30, 2024.
Regardless of use, the minimum rate for any user shall be $1,001.24 per year for FY 2024-25.
The $1,001.24 minimum rate shall also be the sewer charge applied to new sewer connection permits obtained after July 1 for that particular fiscal year ending June 30, 2025.
Regardless of use, the minimum rate for any user shall be $1,036.28 per year for FY 2025-26.
The $1,036.28 minimum rate shall also be the sewer charge applied to new sewer connection permits obtained after July 1 for that particular fiscal year ending June 30, 2026.
Regardless of use, the minimum rate for any user shall be $1,072.55 per year for FY 2026-27.
The $1,072.55 minimum rate shall also be the sewer charge applied to new sewer connection permits obtained after July 1 for that particular fiscal year ending June 30, 2027.
Other than those mentioned above, no other changes are proposed to existing rates, rate calculation methodologies, or rate application methodologies.
Pacifica City Council 14 February 15, 2022
EXHIBIT “B”
GUIDELINES FOR THE SUBMISSION AND TABULATION OF PROTESTS Submission of Protests
1. Any property owner or customer of record may submit a written protest to the City Clerk, either by delivery to the office of the City Clerk or by submitting the protest at the public hearing. Protests must be received by the end of the public hearing. No postmarks will be accepted.
2. Each protest must identify the affected property (by assessor’s parcel number or street address) and include the original signature of the property owner or customer of record.
Email protests cannot be accepted. Although oral comments at the public hearing will not qualify as a formal protest unless accompanied by a written protest, the City Council welcomes input from the community during the public hearing on the proposed fees.
3. Only one protest will be counted per parcel and any one protest submitted in accordance with these rules will be sufficient to count as a protest for that property.
4. In order to be valid a protest must bear the original signature of the property owner with respect to the property identified on the protest or the customer of record for that parcel.
Protests not bearing the original signature of a property owner or customer of record shall not be counted.
5. Any person who submits a protest may withdraw it by submitting to the City Clerk a written request that the protest be withdrawn. The withdrawal of a protest shall contain sufficient information to identify the affected parcel and the name of the property owner or record customer who submitted both the protest and the request that it be withdrawn.
6. A fee protest proceeding is not an election.
7. To ensure transparency and accountability in the fee protest tabulation, protests shall constitute disclosable public records from and after the time they are received.
Tabulation of Protests.
1. The City Clerk shall determine the validity of all protests. The City Clerk shall not accept as valid any protest if the City Clerk determines that any of the following conditions exist:
a. The protest does not identify a property served by the City. b. The protest does not bear an original signature of the property owner of the parcel identified on the protest or the customer of record for that parcel. c. The protest does not state its opposition to the proposed fees. d. The protest was not received by the City Clerk before the close of the public hearing on the proposed fees.
e. A request to withdraw the protest is received prior to the close of the public hearing on the proposed fees.
3. The City Clerk’s decision that a protest is not valid or does not apply to a specific fee shall constitute a final action of the City and shall not be subject to any internal appeal.
Pacifica City Council 15 February 15, 2022
4. A majority protest exists if written protests are timely submitted and not withdrawn by the property owners of, or customers with respect to, a majority of the properties subject to the proposed fee.
5. At the conclusion of the public hearing, the City Clerk shall complete the tabulation of all protests received, including those received during the public hearing and shall report the results of the tabulation to the City Council upon completion. If review of the protests received demonstrates that the number received is manifestly less than one-half of the parcels served by the City with respect to the fee which is the subject of the protest, then the Clerk may advise the City Council of the absence of a majority protest without determining the validity of all protests.