CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
5/9/2022
1 SUBJECT:
Public Hearing on Proposed Ordinance Amending Sections 6-6.403, 6-6.404 and 6-6.406 of Chapter 6 (Sewer Charges) and Section 6-11.102 through Section 6-11.105 of Chapter 11 (Sewer Connection Charges), Title 6 (Sanitation and Health) of the Pacifica Municipal Code.
RECOMMENDED ACTION:
If the City does not receive written protests against the proposed sewer charges from a majority of the parcels receiving wastewater service, staff recommends that the City Council adopt proposed charges for Sewer Services for Fiscal Years 2022/23 through 2026/27 and adopt the revised wastewater capacity fees.
Move:
1) Introduce the Ordinance entitled “An Ordinance of the City Council of the City of Pacifica Amending Chapter 6, “Sewer Charges” and Chapter 11, “Sewer Connection Charges” of Title 6, “Sanitation and Health” of the Pacifica Municipal Code to Revise and Increase the City’s Sewer Charges” be read by title only and that further reading be waived; and
2) Adoption of the Resolution of the City Council of the City of Pacifica Approving the New Wastewater (Sewer) Service Charges and Wastewater (Sewer) Capacity Fees for Pacifica Municipal Wastewater (Attachment 1).
STAFF CONTACT:
Lisa Petersen, Director of Public Works
(650) 738-3767
[email protected] <mailto:[email protected]>
Yulia Carter, Chief Financial Sustainability Officer
(650) 501-6004
[email protected] <mailto:[email protected]>
Maria Aguilar, Plant Manager
(650) 738-4660
[email protected] <mailto:[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 (“Study”) by Bartle Wells Associates (“BWA”), who specializes in wastewater financing.
On February 15, 2022, the City Council held a publicly noticed special meeting to discuss the Pacifica City Council 2
May 09, 2022
sewer rates and one-time developer sewer capacity fees. At this meeting, the Council adopted a resolution stating its intention to hold a public hearing and consider updating the City’s sewer service changes beginning in year FY 22/2023 for a five-year period to FY 2026/27 (Attachment 1). The Council also provided direction to staff for capacity fees related to Accessory Dwelling Units (ADU’s) and other low-income housing.
The sewer rate study is primarily based on the costs of service 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 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 combines 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 needs to incur costs to replace and maintain its sewer treatment infrastructure. Therefore, sewer rate increases are proposed to provide adequate funding for capital replacement and to address 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 (Attachment 2). 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 (Attachment 3).
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). This process was adopted by the Council in 2017.
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 Pacifica City Council 3
May 09, 2022
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, debt service and management of the entire wastewater system as well as the construction of capital projects and estimated CPI. In addition, staff is proposing 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 approximately 2x the amount completed in the previous 10 years. • Increase the amount of Plant equipment replacement by approximately 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. • Protection of critical sewer infrastructure through a fair share contribution to the Beach Boulevard Infrastructure Resiliency Project (BBIRP).
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 to address the 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. The fair share BBIRP contribution is discussed more below.
For fiscal year 2021/22, $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 ground and surface water entering the system and mixing 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 Pacifica City Council 4
May 09, 2022
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 and is available to view at https://www.cityofpacifica.org/depts/asd/finance/2021_2022_proposed_budget/default.asp. 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.
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:
• FY 2022/27: Collection system repairs to address I/I -$6.9M increase • FY 2022/23: Linda Mar/Rockaway Pump Stations - $300K increase • FY 2022/23: Sharp Park Pump Station - $1M increase
• FY 2024/25: Force main Condition Assessment - $75K (new) • FY 2023/26: 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 FY2029/30, 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. Additionally, a $10M fair share contribution to the BBIRP is proposed.
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. This developed 10-year (Attachment 7) 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 Pacifica City Council 5
May 09, 2022
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 completed an assessment of the pump stations in 2018 and recently updated the City’s Collection System Master Plan (Master Plan). Based on this information and the recent rain events and high groundwater tables 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.
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 has estimated the total cost of the Collection System capital projects, including $10M to support the BBIRP (discussed more below), is $35M. The following are the major projects that need to be completed during this period:
• Collection System I/I Repairs and Rehabilitation
Recent rain 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 weather events. These extreme weather 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 approximately 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:
Pacifica City Council 6
May 09, 2022
• Ultraviolet Disinfection System Upgrade
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. The City currently has a Request for Proposals out for design firms to submit on the project to complete the needed design work.
• 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 Summer 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 Pacifica City Council 7
May 09, 2022
the Plant to augment the existing screening at the pump stations. • 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 approximately 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.
Fair Share Contribution to the Beach Boulevard Infrastructure Resiliency Project (BBIRP) 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 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) Multi-Hazard 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.
The BBIRP is a combination of secant pile wall, rock revetment and beach nourishment to replace the existing seawall along Beach Boulevard in West Sharp Park. In line with this discussion in the Master Plan, the rate study includes the $40M identified in the BBIRP MHRA as the cost of relocating this infrastructure over the 10-year Wastewater CIP. This funding would be used to support the BBIRP that will protect the sewer infrastructure in this area. The 5-year rate increase includes a $10M contribution to the BBIRP with funding contributions expected toward design, environmental permitting, and construction. The Wastewater 10-year CIP shows future outlays for the project in year’s 6, 7 and 8 of $10M each year. This is because it is anticipated that the construction work will be concentrated in these later years. A Pacifica City Council 8
May 09, 2022
new 5-year rate study must be approved at the end of the currently proposed 5-year rate increase period and would show this final $30M contribution.
Proposed Rates
Staff is recommending an increase to the City sewer rates over the next five years (See Table 1 below and Attachment 3).
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** $18.81373 $19.47221 $20.15374 $20.85912 $21.58919 $22.34481 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 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
In preparation for tonight’s hearing, on May 9, 2022 the City mailed notices to the owner of each of the 12,834 parcels subject to charges (Attachment 6). Pursuant to Proposition 218 (Article XIID of the California Constitution) the City Council may not impose or revise charges if it receives written protests from the owners of a majority (50% + 1) of the parcels subject to the charges. During the 2017 sewer rate public hearing, a little over 1000 protests were received for the sewer rate increase, which represented a percentage of protests of 8.15%.
As there are 12,834 parcels subject to the proposed fee, a successful majority protest would require the receipt of protests from the owners of 6,418 parcels. As of 5/4/22, the City received 94 protests, which represents a percentage of protests of 0.5%. The protests period concludes Pacifica City Council 9
May 09, 2022
at the termination of the public hearing of this item. If a majority of affected parcel owners do not object to the proposed rate increase, the City Council may act to impose the increase if it so desires.
Capacity Fee Study
BWA has also completed a Capacity Fee study for the City (Attachment 4). 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 demand more water and produce 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. BWA then translated the fee per drainage fixture into a fee for single-family homes. Since the average single-family home has 19 drainage fixture units, BWA’s 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 will likely increase in the future as they are updated.
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’s 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.
On April 20, 2022, the Notice of Public Hearing for the Proposed Adoption of Amendments to the Pacifica Municipal Codes on Sewer Charges and Sewer Connection Charges (Attachment 5) was advertised in the Pacifica Tribune and mailed to property owners who have active planning application for development projects.
February 15, 2022 Special Council Meeting
During a publicized special Council meeting in February, Council and staff discussed the recommended 5-year sewer rate increase and the update to the City Sewer Capacity Fees.
Discussion related to the Capacity fees and application to ADU’s and other types of low-income housing included moving forward with adoption of the fees as recommended by staff and then reviewing if the fees would disincentive this type of housing during upcoming Housing Element Pacifica City Council 10 May 09, 2022
meetings. During the Housing Element meetings, other types of City fees that could impact building of low-income housing units could also be discussed. Staff recommends Council move forward with this approach.
ALTERNATIVE ACTION:
The Council may choose not to adopt the Ordinance of the City Council of the City of Pacifica Amending Chapter 6, “Sewer Charges” and Chapter 11, “Sewer Connection Charges” of Title 6, “Sanitation and Health” of the Pacifica Municipal Code to Revise and Increase the City’s Sewer Charges and Revise the Sewer Connection Charges. This is not recommended as the wastewater utility needs funds for important repairs to the Collection System to address ongoing I/I problems and maintenance at the aging Plant is necessary for the Plant to continue to function appropriately. Additionally, the City needs to update their sewer connection/capacity fees, which have not been updated for many years.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
Adoption of the Resolution and Ordinance of the City Council of the City of Pacifica Amending Chapter 6, “Sewer Charges” and Chapter 11, “Sewer Connection Charges” of Title 6, “Sanitation and Health” of the Pacifica Municipal Code to Revise and Increase the City’s Sewer Charges and Revise the Sewer Connection Charges:
• Stewardship of City Infrastructure and Maintaining a Safe Community: This Adoption of the Resolution and Ordinance of the City Council of the City of Pacifica Amending Chapter 6, “Sewer Charges” and Chapter 11, “Sewer Connection Charges” of Title 6, “Sanitation and Health” of the Pacifica Municipal Code to Revise and Increase the City’s Sewer Charges and Revise the Sewer Connection Charges is the second step necessary to ensure sufficient funding to maintain operations and maintenance of sewer collection system, pump stations, and the Calera Creek Water 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
ATTACHMENT LIST:
Attachment1 - Service Rates and Capacity Fee ResolutionFinal_Rev (DOCX) Attachment2 - Pacifica Wastewater Rates Memo (PDF)
Attachment3 - SewerServiceCharges2022-27 (PDF)
Attachment4 - Pacifica Wastewater Capacity Fee Report (PDF) Pacifica City Council 11 May 09, 2022
Attachment5 - Sewer Rate and Capacity Fee Public Hearing Notice (PDF) Attachment6 -Sewer Rate Public Hearing NoticeUpdated (PDF) Attachment7 - 10-YearCIP (PDF)
Pacifica City Council 12 May 09, 2022
ORDINANCE NO. (ID # 4971)
ORDINANCE NO. ____-C.S.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PACIFICA AMENDING CHAPTER 6, “SEWER CHARGES” AND CHAPTER 11, “SEWER CONNECTION CHARGES” OF TITLE 6, “SANITATION AND HEALTH”
OF THE PACIFICA MUNICIPAL CODE
RELATING TO CHARGES FOR SEWER SERVICE AND CONNECTION FEES RESOLVED by the City Council of the City of Pacifica, California, that WHEREAS, on May 8, 2017, the City adopted five years of rate increases from fiscal years 2017-18 through 2021-22; and
WHEREAS, the City desires to update its sewer service charges and connections fees and delete outdated sections of the Sewer Serve Charge Code and Sewer Connection Fees Code; and
WHEREAS, the City wishes to make these changes to streamline adoption of charges in the future; and
WHEREAS, Pacifica Municipal Code sections 6-6.404 and 6-6.406 currently provide the maximum and minimum annual sewer charges for FY 2017 through 2022 and Article 10 provides the manner in which rate increases may be established; and WHEREAS, staff is recommending that Pacifica Municipal Code sections 6-6.404 and 6-
6.406 be amended to allow the City Council to fix rates for sewer services by resolution and revised from time to time with the objective that the City sewer system be operated on a sound economic basis; and
WHEREAS, Pacifica Municipal Code sections 6-11.102, 6-11.103 and 6-11.104 currently provide the fees for sewer connection, for sewage facilities, for the main trunk interceptor and outfall sewers, and for eliminating inflow and infiltration; and WHEREAS, staff is recommending that Pacifica Municipal Code sections 6-11.102, 6-
11.103 and 6-11.104 be amended to consolidate the sewer connection fees, inflow and infiltration fees, trunk line fees, and sewer tap fees into one sewer capacity fee and to allow the City Council to fix rates for sewer connection fees by resolution and revised from time to time with the objective that the City sewer connection system be operated on a sound economic basis; and
NOW, THEREFORE, the City Council of the City of Pacifica does ordain as follows:
Section 1. Recitals. The City Council of the City of Pacifica does hereby find that the above referenced recitals are true and correct and material to the adoption of this Ordinance.
Section 2. Amended. Sections 6-6.406, “Minimum rate”, of Article 4 and Article 10 within Chapter 6, “Sewer Charges” of Title 6 of the Pacifica Municipal Code are hereby amended by repealing Section 6-6.406 and Article 10 in their entirety.
Pacifica City Council 13 May 09, 2022
Section 6-11.103 “Sewer connection charges to provide funds for sewage facilities, main trunk, interception, outfall sewers, acquisitions, construction or reconstruction of sanitation or sewage facilities,” 6-11.104 “Inflow/Infiltration charges to provide funds for eliminating and equivalent volume of inflow and infiltration as the wastewater flow contributed to the collection system” of Article 1 “Sewer Connection Charges” and Article 3 “Sewer Tapping Charges” within Chapter 11 “Sewer Connection Charges” of Title 6 of the Pacifica Municipal Code are hereby amended by repealing sections 6-11.103 and 6-11.104 in their entirety.
Sections 6-6.403 “Liens” and 6-6.404 “Schedule” of Chapter 6, “Sewer charges” within Title 6 “Sanitation and Health” are amended to read as follows (strikethrough marking items as deleted, underlines marking additions):
Sec. 6-6.403. Liens.
The sewer charges set forth in this article shall be a lien upon the premises and shall be reimbursable to the owner of the premises by any nonowner tenant of other occupant thereof.
(§ 2.03, Ord. 423)
Sec. 6-6.404. Schedule of Charges for Service.
The City Council shall fix the rates to be charged for sewer service by the City, by resolution, and in so doing shall distinguish the different classes of service made available and fix rates appropriate to each class of service. Rates shall be fixed and revised from time to time with the objective that the City sewer system shall be operated on a sound economic basis.
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 a maximum of:
Fourteen dollars and point 08834 cents ($14.08834) per one hundred (100) cubic feet of water consumption, effective July 1, 2017.
Fifteen dollars and point 21541 cents ($15.21541) per one hundred (100) cubic feet of water consumption, effective July 1, 2018.
Sixteen dollars and point 43264 cents ($16.43264) per one hundred (100) cubic feet of water consumption, effective July 1, 2019.
Seventeen dollars and point 58293 cents ($17.58293) per one hundred (100) cubic feet of water consumption, effective July 1, 2020.
Eighteen dollars and point 81373 cents ($18.81373) per one hundred (100) cubic feet of water consumption, effective July 1, 2021.
(§§ 2.04 through 2.59, Ord. 423, as amended by § 1, Ord. 17-C.S., eff. March 11, 1971, § 1, Ord. 113-C.S., eff. June 12, 1974, § 1, Ord. 150-C.S., eff. June 9, 1975, § 1, Ord. 206-C.S., eff. June 9, 1977, § 2, Ord. 223-C.S., eff. March 29, 1978, § 1, Ord. 235-C.S., eff. August 14, 1978, § 1, Ord. 264-C.S., eff. August 13, 1979, § 1, Ord. 305-C.S., eff.
September 9, 1981, § 1, Ord. 345-C.S., eff. September 8, 1982, § 1, Ord. 415-C.S., eff.
August 22, 1984, § 1, Ord. 449-85, eff. August 31, 1985, § 1, Ord. 465-86, eff. August 13, 1986, § 1, Ord. 486-C.S., eff. July 22, 1987, § 1, Ord. 507-C.S., eff. July 27, 1988, § 1, Ord. 531-C.S., eff. July 26, 1989, § 1, Ord. 555-C.S., eff. August 8, 1990, § 1, Ord. 573-C.S., eff. July 24, 1991, § 1, Urgency Ord. 593-C.S., eff. July 6, 1992, § 1, Ord. 606- C.S., eff. June 28, 1993, § 1, Ord. 616-C.S., eff. July 27, 1994, § 1, Ord. 629-C.S., eff.
July 26, 1995, § 1, Ord. 643-C.S., eff. August 7, 1996, § 1, Ord. 655-C.S., eff. August 13, 1997, § 1, Ord. 662-C.S., eff. July 22, 1998, § 1, Ord. 668-C.S., eff. July 28, 1999, § 1, Pacifica City Council 14 May 09, 2022
Ord. 676A-C.S., eff. August 9, 2001, § 1, Ord. 691-C.S., eff. August 8, 2001, § 1, Ord. 702-C.S., eff. July 24, 2002, § 1, Ord. 710-C.S., eff. August 14, 2003, § 1, Ord. 717-C.S., eff. August 26, 2004, § 2, Ord. 719-C.S., eff. October 27, 2004, § 1, Ord. 726-C.S., eff.
July 27, 2005, § 1, Ord. 727-C.S., eff. July 27, 2005, § 1, Ord. 737-C.S., eff. July 26, 2006, § 1, Ord. 748-C.S., eff. July 5, 2007, § 1, Ord. 750-C.S., eff. July 5, 2007 and § 1, Ord. 759-C.S., eff. June 26, 2008; Ord. No. 764-C.S., § 1, eff. June 11, 2009, § 1, Ord. 772-C.S., eff. June 24, 2010, § 1, Ord. 783-C.S., eff. June 23, 2011, § 1, Ord. 790-C.S., eff. June 13, 2012; § 1, Ord. 794-C.S., eff. June 13, 2013, and § 1, Ord. 816-C.S., eff.
June 7, 2017)
Sections 6-11.102 “Sewer connection charges” and 6-11-105 “Sewer connection charges: time of payment for proposed structures” of Article 1 within Chapter 11, “Sewer Connection Charges” within Title 6 “Sanitation and Health” are amended to read as follows (strikethrough marking items as deleted, underlines marking additions):
Sec. 6-11.102. Sewer connection charges.
The City Council shall fix the fees to be charged for sewer connection by the City, by resolution. Fees shall be fixed and revised from time to time with the objective that the City sewer system shall be operated on a sound economic basis.
The following charges are hereby established for the connection of the plumbing of any building or structure to the sanitary sewer system of the City:
(a) Residential schedule in the original City limits:
(1) Six Hundred and no/100ths ($600.00) Dollars for each single-family, townhouse, and condominium dwelling unit; and
(2) Four Hundred Sixty and no/100ths ($460.00) Dollars for each multiple-family dwelling unit.
(b) Commercial schedule in the original City limits:
(1) Six Hundred and no/100ths ($600.00) Dollars per unit for commercial units not discharging industrial waste; and
(2) A charge based on the biochemical oxygen demand removal requirements, gallonage of flow, or a combination thereof, for commercial and industrial units discharging industrial waste;
(c) Areas annexed:
(1) For areas annexed between November 23, 1957 and December 31, 1960, subject to the City's then existing bonded indebtedness for sewer purposes:
(i) Eight Hundred Thirty and no/100ths ($830.00) Dollars for each single-family, townhouse, and condominium dwelling unit;
(ii) Six Hundred Thirty and no/100ths ($630.00) Dollars for each multiple dwelling unit; and
(iii) A charge as set forth in subsection (b) of this section for commercial and industrial units.
(2) For areas annexed after December 31, 1960, subject to the City's then existing bonded indebtedness for sewer purposes:
(i) One Thousand Two Hundred Sixty and no/100ths ($1,260.00) Dollars for each single-family, townhouse, and condominium dwelling unit; (ii) Eight Hundred Eighty and no/100ths ($880.00) Dollars for each multiple dwelling unit; and
(iii) A charge as set forth in subsection (b) of this section for commercial and industrial units.
(d) A charge for schools based on the following formula:
Number of Students× School
Hours×5
(School Days) × 600.00*
Pacifica City Council 15 May 09, 2022
Number of persons
per average family
24 hours/day
7 (days of week)
* Residential unit charge
(e) A charge for the Commercial Recreation District (C-R), as set forth in Section 9-
4.1501 of Article 15 of Chapter 4 of Title 9 of this Code, for the connection of the plumbing of any building or structure to the sanitary sewer system of the City equivalent to one-half (½) the fees set forth, in subsections (a), (b), (c), and (d) of this section.
To provide for construction cost increases due to inflation, on July 1 of each year, beginning September 1, 1984, the fee shall be increased on the basis of the Construction Cost Index (CCI) in the San Francisco Bay Area, published in the issue of the Engineering News Record (ENR) by McGraw-Hill Publication Company. (§ 2, Ord. 5, as amended by § 1, Ord. 374, § 2, Ord. 128-C.S., eff. September 25, 1974, § 1, Ord. 188-C.S., eff. December 22, 1976, § 1, Ord. 265-C.S., eff. October 11, 1979, and § 2, Ord. 385-C.S., eff. February 8, 1984, as renumbered by § 2, Ord. 395-C.S., eff.
March 28, 1984; § 2, Ord. 853-C.S., eff. February 26, 2020) 6-11.105: Sewer connection charges: time of payment for proposed projects The sewer connection charges set forth in this article shall be payable at or before the time of application for such new or increased service. the time a building permit is issued by the City for the construction of a proposed building or structure.
Section 3. Compliance with CEQA. The City Council hereby finds that the action to adopt this Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA), under Section 15061(b)(3) of the CEQA Guidelines (14 Cal. Code Regs. 15000 et seq.) because it can be seen with certainty that there is no possibility that the adoption of this Ordinance may have a significant effect on the environment.
Section 4. Severability. If any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared unconstitutional.
Section 5. Publication. The City Clerk is hereby ordered and directed to certify the passage of this Ordinance by the City Council of the City of Pacifica, California, and cause the same to be published in accordance with State law.
Section 6. Effective Date. This Ordinance shall go into effect thirty (30) days after the date of its passage and adoption.
PASSED AND ADOPTED by the City Council of the City of Pacifica, State of California this ___ day of _______, 2022, by the following vote:
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
Mary Bier, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ ______________________________ Pacifica City Council 16 May 09, 2022
Sarah Coffey, City Clerk Michelle Kenyon, City Attorney Pacifica City Council 17 May 09, 2022
Pacifica City Council 18 May 09, 2022
* * * * *
(ID # 4971) at 5/9/2022 6:00 PM City Council Regular Meeting