3755 S Capital of Texas Highway, Suite 245, Austin, TX 78704 www.raftelis.com
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City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
Contents
1. Executive Summary ..................................................................... 8
1.1. Study Description .........................................................................................................8
1.2. Capacity Fee Introduction ............................................................................................8
1.3. California Legal Requirements ....................................................................................9
1.4. Capacity Fee Calculation Methods ..............................................................................9
1.5. Proposed Water Capacity Fees ....................................................................................9
1.6. Proposed Local Wastewater Capacity Fees ............................................................. 10
2. Economic Framework and Regulatory Requirements ............... 11
2.1. Economic Framework ................................................................................................. 11
2.2. California Government Code Requirements ............................................................. 13
3. Capacity Fee Calculation Methodologies .................................. 15
3.1. Capacity Fee Calculation Methods ............................................................................ 15
3.1.1. Buy-In Method ............................................................................................................... 15
3.1.2. Incremental Cost Method .............................................................................................. 15
3.1.3. Combined Method ......................................................................................................... 16
3.2. Selected Capacity Fee Calculation Method .............................................................. 16
4. Water Capacity Fee .................................................................... 17
4.1. Steps in the Calculation Process ............................................................................... 17
4.2. Residential Assessment Methodology ...................................................................... 17
4.3. Update of Residential EDU Relationships ................................................................. 18
4.4. Incremental EDU Additions Through 2035 ................................................................ 19
4.4.1. Existing 2025 Systemwide EDUs .................................................................................. 19
4.4.2. Projected Incremental EDUs Through 2035 .................................................................. 20
4.5. Planned Infrastructure Additions Through 2035 ...................................................... 21
4.6. FY 2027 Water Capacity Fee Calculation .................................................................. 23
4.7. FY 2027 Assessment Schedule .................................................................................. 23
4.8. Annual Water Capacity Fee Adjustments ................................................................. 24
5. Local Wastewater Capacity Fees .............................................. 25
5.1. S ewer Units .................................................................................................................. 25
5.2. Methodology Used for Local Wastewater Capacity Fees ........................................ 25
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
5.3. Annual Local Wastewater Capacity Fee Adjustments ............................................. 26
Tables
Table 1-1: Proposed Updated FY 2027 Water Capacity Fees ................................................................ 10 Table 1-2: Proposed Updated FY 2027 Local Wastewater Capacity Fee ............................................... 10 Table 4-1: Residential Density and EDU Relationships Used in Current Capacity Fees ......................... 18 Table 4-2: Updated Residential EDU Relationships ............................................................................... 18 Table 4-3: Estimate of Actual Systemwide EDUs in 2022 - 2025 ........................................................... 19 Table 4-4: Projection of Incremental EDUs Through 2035 ..................................................................... 21 Table 4-5: Planned Infrastructure Additions Benefiting New Connections Through 2035 ....................... 22 Table 4-6: Calculation of Proposed FY 2027 Capacity Fee .................................................................... 23 Table 4-7: Derivation of the Proposed FY 2027 Capacity Fee Assessment Schedule ............................ 23 Table 4-8: Proposed Updated FY 2027 Water Capacity Fees ................................................................ 24 Table 5-1: Planned Growth-Related Capital Expenditures Through 2035 .............................................. 25 Table 5-2: Calculation of Proposed Updated FY 2027 Local Wastewater Capacity Fee ......................... 26
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
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City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
8 1. Executive Summary
1.1. Study Description
In November 2024, the City of Roseville (City) engaged Raftelis to conduct a Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study. The overarching objective of the study was to develop updated water and local wastewater capacity fees including:
• Reviewing the current methodology and assumptions used by the City to determine its water and local wastewater capacity fees.
• Evaluating the City’s current water and local wastewater capacity fees in relation to compliance with applicable California law.
• Development of updated water and local wastewater capacity fees for implementation in FY 2027.
• Recommending potential modifications to the current water and local wastewater capacity fees to ensure compliance with California law and water industry best practices.
1.2. Capacity Fee Introduction
Capacity fees recover a portion of the cost of past investments in existing infrastructure that will be used to provide services to future customers. They can also be used to recover the cost of planned investments in infrastructure that will provide services to future customers or the proportional share of planned investments that will serve both future and existing customers. Cash receipts from capacity fees lower the amount of revenue that must be collected through utility rates (i.e., they offset the annual revenue requirement from rates). Depending on the utility in question, the fees used to recover the cost of growth-related infrastructure are referred to as capacity fees, connection fees, system development charges, utility impact fees or various other names. The term “capacity fee” is used throughout this report.
It is important to note that California utilities are not required to assess capacity fees. Many utilities choose to fund all growth-related capital expenditure through utility rates. Further, governing bodies are not required to charge the maximum legally defensible capacity fees calculated as part of a nexus study. Many governing bodies, for various policy or economic development considerations, choose to implement capacity fees lower than those calculated in a nexus study.
The principles and procedures underlying the calculation of water and wastewater capacity fees are similar.
Industry standard procedures for the calculation of water capacity fees can be found in the American Water Works Association (AWWA) publication Manual of Water Supply Practices M1, Principles of Water Rates, Fees, and Charges, 8th Edition (AWWA Manual M1). Industry standard procedures for the calculation of wastewater capacity fees can be found in the Water Environment Federation publication (WEF) Manual of Practice No. 27, Financing and Charges for Wastewater Systems, 4th Edition (WEF Manual 27).
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
9 1.3. California Legal Requirements
As discussed more in Section 2 of this report, in the state of California, the basic statutory standards governing water and wastewater capacity fees are embodied in Government Code Sections 66000 et seq.
Code §66013 (b)(3) describes a "Capacity Charge" in the following manner:
"Capacity charge" means a charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights and entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities.”
The requirement that capacity fees be cost-based is provided in Government Code § 66013(a) which states:
“Notwithstanding any other provision of law, when a local agency imposes fees for water connections or sewer connections, or imposes capacity charges, those fees or charges shall not exceed the estimated reasonable cost of providing the service for which the fee or charge is imposed, unless a question regarding the amount the fee or charge in excess of the estimated reasonable cost of providing the services or materials is submitted to, and approved by, a popular vote of two-thirds of those electors voting on the issue.”
1.4. Capacity Fee Calculation Methods
There are three industry-standard methods for calculating water and wastewater capacity fees. Each method is allowable under California Government Code § 66013(b)(3).
1. Buy-In Method
2. Incremental Cost-Method
3. Combined Method
As discussed in Section 3 of this report, Raftelis used the incremental cost method to update the City’s water and local wastewater capacity fees.
1.5. Proposed Water Capacity Fees
Table 1-1 shows the proposed updated water capacity fees for FY 2027 which were calculated using the incremental cost approach based on a 2026 – 2035 planning horizon. Although no changes are recommended to the fundamental structure of the City’s water capacity fees, the calculated demand relationships between medium- and high-density residential customers have changed (see Column A, lines 2 - 4 and Column C, lines 2 - 4). These changes are discussed in greater detail in the next section of this report.
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
10 Table 1-1: Proposed Updated FY 2027 Water Capacity Fees Land Use Type
A
Current
EDUs
B
Current
FY 2026 Fee
C
Proposed EDUs
D
Proposed
FY 2027 Fee
E
$
Difference
F
%
Difference
Residential
Low Density (LDR)
0 – 6.99 Units per Acre 1.00 $12,688 1.000 $12,388 ($300) (2.36%) Medium Density (MDR)
7.00 – 12.99 Units per Acre 0.60 $7,614 0.563 $6,970 ($644) (8.45%) High Density (HDR)
> 13.00 Units per Acre 0.40 $5,074 0.550 $6,808 $1,734 34.17% Multi Family
per Dwelling Unit
0.40 $5,074 0.550 $6,808 $1,734 34.17%
Commercial and Irrigation
Meter Size
Meter Flow
Equivalencies
(1)
Current
FY 2026 Fee
Meter Flow
Equivalencies
Proposed
FY 2027 Fee
$
Difference
%
Difference
3/4" 1.0 $12,688 1.0 $12,388 ($300) (2.36%)
1.0" 1.7 $21,570 1.7 $21,060 ($509) (2.36%)
1.5" 3.3 $41,870 3.3 $40,882 ($988) (2.36%)
2.0" 5.3 $67,246 5.3 $65,659 ($1,587) (2.36%)
3.0" 11.7 $148,450 11.7 $144,945 ($3,504) (2.36%)
4.0" 20.0 $253,760 20.0 $247,769 ($5,991) (2.36%)
6.0" 41.7 $529,090 41.7 $516,599 ($12,490) (2.36%)
8.0" 60.0 $761,280 60.0 $743,308 ($17,972) (2.36%)
10.0" 96.7 $1,226,930 96.7 $1,197,965 ($28,964) (2.36%)
12.0" 143.3 $1,818,190 143.3 $1,775,268 ($42,922) (2.36%) (1) Meter flow equivalencies specified by the City
1.6. Proposed Local Wastewater Capacity Fees
The wastewater capacity fees updated in this study were for the City’s local collection and conveyance system that transports sanitary sewage flows to the City’s two wastewater treatment plants. While this report refers to these fees as “Local Wastewater Capacity Fees,” this term has the same meaning as “Local Sewer Connection Fee” as defined in the Roseville Municipal Code. Expenses eligible for recovery through local capacity fees include costs associated with upsized local sewer collection infrastructure, wastewater lift stations, new wastewater collection system vehicles, and new wastewater collection system support facilities such as maintenance shops and equipment storage buildings. The wastewater treatment plants provide wastewater treatment services for the City and its two regional partners, the South Placer Municipal Utility District and Placer County. The capacity costs of the wastewater treatment plants are recovered through a regional capacity/connection fee. Therefore, they were not addressed in this study. No changes are recommended to the fundamental structure of the City’s local wastewater capacity fees. Table 1-2 shows the proposed updated local wastewater capacity fees which were also calculated under the incremental cost approach.
Table 1-2: Proposed Updated FY 2027 Local Wastewater Capacity Fee All Land Use Types
A
Current
FY 2026 Fee
B
Proposed
FY 2027 Fee
C
$
Difference
D
%
Difference
Local Sewer Connection Fee per Sewer Unit $460 $817 $357 77.6%
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
11 2. Economic Framework and
Regulatory Requirements
2.1. Economic Framework
Capacity fees can be used to recover a portion of the cost of past investments in existing capacity-related infrastructure that will be used to provide services to future customers. They can also be used to recover the cost of planned investments in infrastructure that will provide services to future customers or the proportional share of planned investments that will serve both future and existing customers. Cash receipts from capacity fees lower the amount of revenue that must be collected from customers through water rates (i.e., they offset the annual revenue requirement from rates).
The infrastructure costs recovered through capacity fees are primarily associated planned future investments in “backbone” infrastructure. For water utilities, backbone infrastructure includes assets associated with functions such as supply, treatment, storage, pumping, and transmission. For wastewater utilities, backbone infrastructure includes assets associated with functions such as wastewater conveyance, pumping, treatment, and biosolids handling. Utility assets that were paid for by developers such as water distribution lines or wastewater collection system lines are not included in the capacity fee cost basis.
The basic economic philosophy behind capacity charges is that the cost of the facilities required to provide service should be paid for by those who receive the benefit. To fairly distribute the value of existing or expanded utility infrastructure, the charge should reflect a reasonable estimate of the cost of providing capacity to new users and not unduly burden existing customers through increased utility rates. Accordingly, many utilities make the philosophy that growth will pay for growth one of their primary guiding principles when developing their capacity charge structure.
The goal of maintaining equity between new and existing customers is reflected in the American Water Works Association (AWWA) Manual of Water Supply Practices M1, Principles of Water Rates, Fees, and Charges, 7th Edition (AWWA Manual M1). Page 323 (Chapter V11.2, System Development Charges):
The use of SDC receipts is generally limited. First, SDC receipts can be used to directly pay for a growth-related capital improvement project. In using SDC receipts in this manner, the utility will likely have avoided, at least minimized, the use of long-term debt or pay-as-you-go rate funding for the project that shelters the existing ratepayers from the cost of expansion of the system and, hence, may reduce the need for monthly user rate increases. The other typical use of SDC receipts is to apply them against growth-related debt service. When a utility issues long-term debt to pay for a growth-related capital project, the associated debt service is generally paid using SDC receipts.”
Similarly, the Water Environment Federation publication (WEF) Manual of Practice No. 27, Financing and Charges for Wastewater Systems, 4th Edition (WEF Manual 27). Page 200 (Chapter 10, System Development Charges) also discusses rate equity:
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
12 “System development charge proceeds are typically used to pay for capital projects related to growth and/or reimburse existing customers for past system capacity investments. Application of these fees assists the utility in implementing a “growth pays for growth” policy and helps with future capital improvement planning.” “Capital projects that are required to meet the demands of growth are often a burden on existing wastewater ratepayers. Through the use of SDCs [system development charges], costs associated with growth may largely be shifted to new customers and away from the existing wastewater customers over time, helping achieve intergenerational equity between customers.”
In general, to withstand legal challenges, there must be a rational nexus between the capacity fees charged by a utility, the cost of capacity-related infrastructure required to accommodate demand growth created by future customers or otherwise provide some form of proportional benefit to future customers, and the benefits that new development receives from capacity-related infrastructure. Page 324 of AWWA Manual M1 summarizes three rational nexus tests:
1. There must be a connection established between new development and new or expanded facilities required to accommodate such development.
2. The cost of new or expanded facilities required to accommodate new development must be identified.
3. There must be an appropriate apportionment of costs to new development in proportion to the benefits it receives.
Similarly, the rational nexus framework summarized on Page 202 of WEF Manual 27 is:
1. There must be a reasonable connection between the new development that will pay capacity charges and the need for capacity-related infrastructure.
2. There must be a reasonable connection between the costs incurred to meet demand growth and the costs of serving other customers.
3. There must be a reasonable connection between identified costs and the level of capacity charges.
4. There must be a reasonable connection between costs and the amount of revenue generated by capacity charges.
5. There must be a reasonable connection between the cost of the utility for new development and the amount of the capacity charge.
For many utilities, especially those with rapid demand growth, capacity fees can be a significant source of funding for capital improvements. Nonetheless, some utilities choose to fund the infrastructure required to support demand growth solely through the operational cash flows provided by utility rates and charges. It is also important to note that a utility may charge capacity fees even if it has adequate installed infrastructure capacity to meet long-term demand growth. Pages 324 and 325 of AWWA Manual M1 state the following in this regard:
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
13 “The referenced nexus test can be satisfied based on an assessment of both current and future capacity available to meet growth-related demands. For example, a utility that has, in the extreme, constructed all of the water system capacity required through planned "build-out" of the service area can still make the nexus between the charge and the facilities needed to accommodate the anticipated growth. In this example, the basis for the charge would be the existing capacity available to service new demand.”
Although not specifically focused on water or wastewater capacity fees, an excellent discussion of fees imposed by California local governments to help pay for the cost of new development is provided in the California Department of Housing and Community Development (DHCD) publication, Residential Impact Fees in California, Current Practices and Policy Considerations to Improve the Implementation of Fees Governed by the Mitigation Fee Act, August 5, 2019. Page 50 of the publication provides a broader nexus discussion.
“Section 66001 of the California Government Code lays out the legal requirements for local agencies regarding the creation and imposition of fees on “Development Projects,” defined as a project involving the issuance of a permit for construction or reconstruction. With regards to the reasonableness of the fees, local agencies are required to make two determinations: whether there is a reasonable relationship between the fee’s use and the type of development project on which the fee is imposed, and how there is a reasonable relationship between the need for the public facility and the type of development project on which the fee is imposed. Moreover, local agencies are also responsible for determining the reasonable relationship between the amount of the fee and the cost of the public facility.”
2.2. California Government Code Requirements
In establishing capacity charges, it is important to understand and comply with state and local laws and regulations governing the establishment, calculation, and implementation of these fees. The following sections summarize the regulations applicable to the development of capacity charges for the City as currently understood by Raftelis
1. As originally noted in the Executive Summary section of this report, in the state of California, the basic statutory standards governing water and wastewater capacity fees are embodied in Government Code Sections 66000 et seq. Government Code §66013 (b) (3) describes a "Capacity Charge" in the following manner:
"Capacity charge" means a charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights and entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities.”
The requirement that capacity fees be cost-based is provided in Government Code § 66013(a) which states:
1 Raftelis does not practice law, nor does it provide legal advice. The above discussion provides a general overview of Raftelis’ understanding as rate and fee practitioners and is labeled “legal framework” for literary convenience only. The City should consult with its legal counsel for clarification and/or specific guidance.
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
14 “Notwithstanding any other provision of law, when a local agency imposes fees for water connections or sewer connections, or imposes capacity charges, those fees or charges shall not exceed the estimated reasonable cost of providing the service for which the fee or charge is imposed, unless a question regarding the amount the fee or charge in excess of the estimated reasonable cost of providing the services or materials is submitted to, and approved by, a popular vote of two-thirds of those electors voting on the issue.”
The procedures for handling capacity fee receipts are found in Government Code § 66013(c) which specifies:
“A local agency receiving payment of a charge in paragraph (3) of subdivision (b) it shall deposit it in a separate capital facilities fund with other charges received, and account for the charges in a manner to avoid commingling with other moneys of the local agency, except for investments, and shall expend those charges solely for the purposes for which the charges were collected.”
Other relevant Government Code sections related to capacity fees include:
Government Code §§ 66016
• Requirement for a public meeting before levying a capacity fee • Requirement that the capacity fee calculation be available prior to the public meeting Government Code §§ 66017
• Specification of the effective date of capacity fees after adoption Government Code §§ 66020
• Procedures for protesting adopted capacity fees
Government Code §§ 66022
• Procedures for the judicial review of capacity fees
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
15 3. Capacity Fee Calculation
Methodologies
3.1. Capacity Fee Calculation Methods
Regardless of which methodology is used, the basic formula for calculating capacity fees is to divide the value of infrastructure used to serve customer growth by existing or projected customer demand. Demand is generally expressed on the basis of equivalent dwelling units (EDUs) or equivalent 3/4” meters.
Figure 3-1: Generic Capacity Fee Calculation
Cost Basis ÷ EDUs = $ Capacity Fee
3.1.1. Buy-In Method
The 7th edition of AWWA Manual M1 (page 329) states that “the buy-in method is based on the value of the existing system’s capacity. This method is typically used when the existing system has sufficient capacity to serve new development now and into the future.” The premise is that new customers are entitled to water or wastewater service at the same cost as existing customers. Under the buy-in method, new customers pay an amount equal to the current infrastructure value. This infrastructure value is then divided by current system demand to determine the cost to “buy-in” per unit of capacity purchased. The buy-in method was not used to update the City’s water and local wastewater capacity fees.
Figure 3-2: Buy-In Calculation
Replacement Cost of Existing Infrastructure ÷ Existing EDUs = $ Capacity Fee per EDU
3.1.2. Incremental Cost Method
The incremental cost method was used by Raftelis to update the City’s water and local wastewater capacity fees. While the buy-in method relies on the valuation of existing infrastructure, the incremental cost approach relies on the present value cost of planned future infrastructure additions. According to the 7th edition of AWWA Manual M1 (page 330) this method is generally most appropriate for utilities where the existing system has “limited or no capacity to serve new development and new or incremental facilities are needed to serve development now and into the future.”
The City’s water and local wastewater utilities require future infrastructure investments through 2035 to serve projected demand growth and increase resiliency for water supply conveyance. This is especially true as it relates to the City’s planned investments in infrastructure designed to enhance systemwide water supply resiliency. These water supply investments will benefit both existing customers and new customers connecting to the water utility system in the future.
When utilizing the incremental cost approach, it is important to have a capital improvement plan that identifies the costs associated with new capacity, the timing of the expenditure, and the proposed source(s) of funds for those capital improvements. The incremental cost approach is designed to equitably distribute these
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
16 capital costs to new customers in proportion to their projected usage of the infrastructure and the investment required to develop the infrastructure.
Figure 3-3: Incremental Cost Method
Present Value of Planned Infrastructure Benefiting New Customers ÷ Projected Incremental EDUs to be Served = $ Capacity Fee per EDU
3.1.3. Combined Method
The combined method is typically used where some remaining capacity is available to serve new development in parts of a system, but additional expansion is also necessary to accommodate new development for other parts of the system. Or where sufficient capacity remains in some system infrastructure functional components (e.g., treatment) but is deficient in others (e.g., water supply). In utilizing the combined method, it is important that system asset costs are not double counted when combining costs of the existing system with future costs from expanding the system. The costs of planned future infrastructure should not be included in the valuation of existing infrastructure assets. With the combined method, the capacity charge is based on the weighted average of the buy-in method and the incremental cost method. (i.e., the remaining existing capacity and the new, additional capacity).
Figure 3-4: Combined Method
Weighted Average of the Buy-In Capacity Fee + Incremental Cost Capacity Fee = $ Capacity Fee
3.2. Selected Capacity Fee Calculation Method
As discussed above, the City’s water and local wastewater utilities require future infrastructure investments through 2035 to meet projected demand growth and increase resiliency for water supply conveyance. This is especially true as it relates to the City’s planned investments in infrastructure designed to enhance systemwide water supply resiliency. The use of the forward-looking incremental method is fully aligned with the City’s planned long-term investments in both water supply reliability and other required growth-related infrastructure.
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
17 4. Water Capacity Fee
4.1. Steps in the Calculation Process
The process used to calculate updated capacity fees involved the following steps. Each is discussed below in this section of the report.
• Review of Residential Assessment Methodology (Section 4.2) • Update of Residential EDU Relationships (Section 4.3) • Incremental EDU Additions Through 2035 (Section 4.4)
• Planned Infrastructure Additions Benefiting New Connections Through 2035 (Section 4.5) • FY 2027 Water Capacity Fee Calculation (Section 4.6)
• FY 2027 Water Capacity Fee Assessment Schedule (Section 4.7)
4.2. Residential Assessment Methodology
The City assesses water capacity fees for new or enlarged commercial and irrigation connections based on water meter size. This is a common approach used by many utilities in California and across the United States. In contrast to its meter-sized based approach for commercial and irrigation properties, the City uses a development density-based methodology to assess capacity fees for new or enlarged residential connections.
The City’s density-based residential assessment methodology addresses an inequity that may occur when residential water capacity fees are assessed based on meter size. Under the meter size-based assessment approach, if two residential properties are served by the same meter size (e.g., 3/4” or 1”) they will pay the same capacity fee. This is true even if they have significantly different lot sizes. Over the long-term, due to its higher outdoor irrigation usage, the connection serving the larger lot may impose higher capacity demands on the water utility system. In contrast, the connection serving the smaller lot may impose lower long-term capacity demands on the water system due to its lower outdoor irrigation usage. This fact is not reflected when they initially connect to the system and pay the same capacity fee.
The City’s density-based system assesses water capacity fees based on the number of residential dwelling units located within a given subdivision. This approach creates a closer alignment between the capacity fees paid by developers and the long-term capacity demands that new connections will ultimately impose on the water utility system through outdoor irrigation usage. For example, new connections located in low density residential developments (i.e., developments with less dwelling units per acre and the larger lot sizes) pay higher capacity fees that are more reflective of the higher capacity demands they will place on the water utility system due to their higher outdoor irrigation usage. Similarly, new connections located in high density residential developments (i.e., developments with more dwelling units per acre and smaller lot sizes) pay lower capacity fees that are more reflective of the lower capacity demands they will place on the water utility system due to their lower outdoor irrigation usage.
The City maintains three residential density classifications. Residential properties located in developments with a density of 0 – 6.99 dwelling units per acre are classified as low density residential. The average water consumption of low density residential connections is defined as equivalent to 1.0 dwelling unit (i.e., 1.0
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
18 EDU). Residential properties located in developments with a density of 7.00 – 12.99 units per acre are defined as medium density residential. Finally, residential properties located in developments with a density of greater than 13.00 units per acre are classified as high density residential. The EDU ratings assigned to medium and high density residential properties are expressed in comparison to 1.0 EDU low density residential properties.
Table 4-1 summarizes the residential density classifications and EDU relationships underlying the City’s current residential capacity fees. The values shown in Table 4-1 have been used by the City since approximately 2015 without modification.
Table 4-1: Residential Density and EDU Relationships Used in Current Capacity Fees Residential Land Use Density per Acre
Average Gallons
per Day per Unit
EDU Relationship Based
on LDR Water Use
Low Density 0 – 6.99 Units per Acre 420 1.0
Medium Density 7.00 – 12.99 Units per Acre 250 .60
High Density > 13.00 Units per Acre 170 .40
4.3. Update of Residential EDU Relationships
Residential EDU relationships were updated based on actual historical data provided by the City for the years 2022 – 2025. Table 4-2 presents this analysis. The values shown in Rows 2 – 4 reflect the average over this four-year period. These values were used in the calculation of the proposed updated water capacity fees Table 4-2: Updated Residential EDU Relationships
Line Period Low Density Medium Density High Density
1 Average 2022 – 2025
2 Data Points (Note 1) 39,362 6,238 10,608
3 Gallons per Unit per Day 339.13 190.82 186.36
4 Percent of LDR Water Use 100.0% 56.3% 55.0%
5 2025
6 Data Points 40,549 7,228 10,848
7 Gallons per Unit per Day 363.57 214.04 198.35
8 Percent of LDR Water Use 100.0% 58.9% 54.6%
9 2024
10 Data Points 39,797 6,605 10,653
11 Gallons per Unit per Day 328.32 183.26 186.08
12 Percent of LDR Water Use 100.0% 55.8% 56.7%
13 2023
14 Data Points 39,115 5,920 10,019
15 Gallons per Unit per Day 321.00 177.18 169.00
16 Percent of LDR Water Use 100.0% 55.2% 52.6%
17 2022
18 Data Points 37,987 5,197 10,912
19 Gallons per Unit per Day 343.65 188.79 192.00
20 Percent of LDR Water Use 100.0% 54.9% 55.9%
Note 1: A data point reflects the number of dwelling units associated with each individual water customer accounts.
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
19 .
4.4. Incremental EDU Additions Through 2035
4.4.1. Existing 2025 Systemwide EDUs
As discussed in Section 3.1.2, the incremental method of calculating capacity fees is dependent on two key factors. First is the number of total system incremental EDUs projected to be added during the planning horizon (i.e., the projected growth in demand). Second is the present value of planned infrastructure additions during the planning horizon that will provide services to future customers or the proportional share of planned investments that will serve both future and existing customers. The planning horizon used for the water capacity fee update as 2026 - 2035.
Table 4-3 presents the estimate of systemwide EDUs for the years 2022 - 2025. The EDU estimates shown for 2025 (Column D, Lines 14 – 19) were the starting point for the projection of incremental EDUs through the 2035 planning horizon.
Table 4-3: Estimate of Actual Systemwide EDUs in 2022 - 2025
A B C D
Line Description 2022 2023 2024 2025
1 Low Density Residential Data Points 37,987 39,115 39,797 40,549 2 Low Density Residential EDU Factor 100.0% 100.0% 100.0% 100.0% 3 Low Density EDUs 37,987 39,115 39,797 40,549
4 Medium Density Residential Data Points 5,197 5,920 6,605 7,228 5 Medium Density Residential EDU Factor 54.9% 52.6% 55.8% 58.9% 6 Medium Density EDUs 2,855 3,268 3,687 4,255
7 High Density Residential Data Points 10,912 10,019 (Note 1) 10,653 10,848 8 High Density Residential EDU Factor 55.9% 52.6% 56.7% 54.6% 9 High Density EDUs 6,097 5,275 6,038 5,918
10 Non-Residential Annual Gallons per Year 2,669,036,199 2,550,269,557 2,744,859,684 2,765,865,122 11 Residential Gallons per Day 344 321 328 364
12 Residential Gallons per Year 125,560 117,165 119,835 132,703 13 Non-Residential EDUs 21,257 21,766 22,905 20,843
14 EDU Summary
15 Low Density 37,987 39,115 39,797 40,549
16 Medium Density 2,855 3,268 3,687 4,255
17 High Density 6,097 5,275 6,038 5,918
18 Commercial and Irrigation 21,257 21,766 22,905 20,843 19 Total EDUs 68,196 69,424 72,427 71,565
Note 1: Several data points were excluded from the 2023 dataset prior to the above calculations. The rationale for these exclusions was not documented, and therefore the reason for their removal is unknown.
The estimates of commercial and irrigation EDUs shown in Table 4-3 are based on the relationship in the billed water consumption of non-residential and low density residential customers in any given year. For example, in 2025 the billed water consumption of non-residential customers was 2.766 billion gallons (Column D, Line 10). The estimated annual water use of low density residential customers was 132,703 gallons (Column D, Line 12). This means that the 2025 non-residential customer consumption of 2.766 billion gallons was equivalent to 20,843 low density residential EDUs as shown in Column D, Line 13.
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
20 4.4.2. Projected Incremental EDUs Through 2035
The projected number of systemwide EDUs at 2035 is 83,425. This reflects an incremental increase of 11,860 EDUs from the existing level in 2025. This projection is based on a 1.55% annual growth in EDUs for every land use type (low, medium, and high density residential, and commercial and irrigation). The annual EDU growth rate of 1.55% as based on data from the City’s Development Services Department.
Table 4-4 shows the projection of incremental EDUs through 2035.
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
21 Table 4-4: Projection of Incremental EDUs Through 2035
A B C D E F G H I J K L
Land Use 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Incremental
Change
Low Density Residential 40,549 41,176 41,812 42,458 43,114 43,780 44,457 45,144 45,841 46,550 47,269 6,720 Medium Density Residential 4,255 4,321 4,388 4,456 4,524 4,594 4,665 4,737 4,811 4,885 4,960 705 High Density Residential 5,918 6,010 6,103 6,197 6,293 6,390 6,489 6,589 6,691 6,794 6,899 981 Commercial 20,843 21,165 21,492 21,824 22,161 22,503 22,851 23,204 23,563 23,927 24,297 3,454 Total EDUs 71,565 72,671 73,794 74,934 76,092 77,268 78,462 79,674 80,905 82,155 83,425 11,860
4.5. Planned Infrastructure Additions Through 2035
City staff developed detailed projections of planned infrastructure through the 2035 planning horizon. Two types of infrastructure were included. The first type of planned infrastructure additions are fully or partially required to increase the capacity of various system functions to serve demand growth. For example, they add capacity to the water storage, transmission, or pumping functions. The second type of planned infrastructure additions enhance long-term water supply portfolio resiliency (i.e., they enhance long-term water supply resiliency).
They accrue to the benefit of both new customers connecting to the system and existing customers. Table 4-5 shows a detail of planned infrastructure additions through 2035. Key things to note about the information provided Table 4-5 include:
• The total cost of planned expenditures is $786,523,084 as shown in Column A, Line 25. $146,924,615 will be recovered from new customers through capacity fees (Column F, Line 25). $639,598,469 will be recovered from existing customers through rates (Column G, Line 25).
• The water supply resiliency costs allocated to new customers are $103,366,365 as shown in Column C, Line 25. 14.2% of water supply resiliency costs (Column B) were allocated to new customers because total projected EDUs will be 83,425. Of this amount, 11,860 EDUs will be added during the period 2026 – 2035 (both values are shown in Table 4-4). The ratio of new customer EDUs to total projected EDUs in 2035 is 14.2% (11,860 ÷ 83,425).
• The cost of planned infrastructure projects required to fully or partially add to the capacity to serve new customers is $43,558,250 (Column E, Line 25).
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
22 Table 4-5: Planned Infrastructure Additions Benefiting New Connections Through 2035
A B C D E F G
Charged to New EDUs (Capacity Fees)
Water Supply Resiliency Growth Infrastructure
Line Project
Total Present Value
Cost of All Projects
Through 2035
% Assigned to New
Customer Supply
Resiliency
$ New Customer
Supply Resiliency
Portion
% Assigned to
New
Customer
Growth
Infrastructure
$ New Customer
Growth
Infrastructure
$ Total New
Customer
Capacity Fee
Funded
$ Net Rate
Payer Funded
1 (assign new Project No. break out from 500147) Treated Water Pipeline (from PCWA service area to Rsvl) $98,406,664 14.2% $13,989,612 $0 $13,989,612 $84,417,052 2 500505 -Cooperative Raw Water Supply Reliability Project $154,000,000 14.2% $21,892,829 $0 $21,892,829 $132,107,171 3 500148 - Potable Water Systems Evaluation $950,000 14.2% $135,053 $0 $135,053 $814,947 4 F25006-Capacity Fee Analysis $600,000 $0 1 $600,000 $600,000 $0 5 Water Future Initiative - 5 ASR Wells (Marlin, Misty woods, Kaiser, Pleasant Grove, Campus Oaks) $39,900,000 14.2% $5,672,233 $0 $5,672,233 $34,227,767 6 F25067-NE tank 6 mg $8,800,000 $0 0.5 $4,400,000 $4,400,000 $4,400,000 7 RMOU - 5 mg Tank and Pump station (Sierra Vista) $15,100,000 $0 1 $15,100,000 $15,100,000 $0 8 F25008-Water Intertie with Citrus Heights Water $244,200 14.2% $34,716 $0 $34,716 $209,484 9 F25043-Interties and Pressure Reducing Stations (Amoruso Specific Plan/West Roseville Specific Plan) $625,000 14.2% $88,851 $0 $88,851 $536,149 10 500016 - Sites Reservoir Project $225,000 $0 0.5 $112,500 $112,500 $112,500 11 500059-Groundwater Well Property $491,500 $0 0.5 $245,750 $245,750 $245,750 12 Amoruso Ranch SP (Pump Station) - Obligation in DA (to be built offsite) $8,600,000 14.2% $1,222,587 $0 $1,222,587 $7,377,413 13 Creekview SP (Pump Station) - Obligation in DA (to be built offsite) $9,023,120 14.2% $1,282,738 $0 $1,282,738 $7,740,382 14 SVSP (Pump Station) - Obligation in DA, JM-60 or FD-63 (to be built Offsite) $18,046,240 14.2% $2,565,476 $0 $2,565,476 $15,480,764 15 WRSP Westpark (Pump Station) - Obligation in DA Westpark W-76 (to be built Offsite) $9,023,120 14.2% $1,282,738 $0 $1,282,738 $7,740,382 16 WRSP Fiddy (Pump Station) - Obligation in DA Fiddyment (to be built Offsite in lieu of F-66) $18,046,240 14.2% $2,565,476 $0 $2,565,476 $15,480,764 17 400063-Regional Wtr Supply Reliab Std $442,000 14.2% $62,835 $0 $62,835 $379,165 18 500512 - RiverArc $266,000,000 14.2% $37,814,887 $0 $37,814,887 $228,185,113 19 F25011-Corridors Specific Plan $4,200,000 $0 0.5 $2,100,000 $2,100,000 $2,100,000 20 500510 - Emergency Backup Generators - Well Sites $500,000 14.2% $71,081 $0 $71,081 $428,919 21 EU Operations Center $30,000,000 $0 0.7 $21,000,000 $21,000,000 $9,000,000 22 F25040-Folsom Reliability Project $58,800,000 14.2% $8,359,080 $0 $8,359,080 $50,440,920 23 F25101-Zone 4 to Zone 1 Pump Station - Blue Oaks $7,000,000 14.2% $995,129 $0 $995,129 $6,004,871 24 Antelope Pipeline Intertie (proposed downstream
improvements) $37,500,000 14.2% $5,331,046 $0 $5,331,046 $32,168,954 25 Total $786,523,084 $103,366,365 $43,558,250 $146,924,615 $639,598,469
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
23 4.6. FY 2027 Water Capacity Fee Calculation
Having calculated the inputs described above in Sections 4.2 – 4.5, the process of calculating updated FY 2027 water capacity fees is straightforward. Table 4-5 shows this calculation which is $12,388 for low density residential customers and 3/4” commercial and irrigation meters.
Table 4-6: Calculation of Proposed FY 2027 Capacity Fee Line Calculation of Capacity Fee Amounts Source
1 Supply Reliability Projects Benefiting New Customers $103,366,365 Table 4-5, Column C, Line 25 2 Growth Infrastructure Benefiting New Customers $43,558,250 Table 4-5, Column E, Line 25 3 Total Cost Basis (Present Value of Planned Infrastructure) $146,924,615 4 5 Incremental EDU Additions Through 2035 11,860 Table 4-4, Column L 6 Water Capacity Fee $12,388
4.7. FY 2027 Assessment Schedule
Table 4-7 shows the derivation of the proposed FY 2027 capacity fee assessment schedule.
Table 4-7: Derivation of the Proposed FY 2027 Capacity Fee Assessment Schedule Residential Assessment Schedules (Density Based)
Line Density Classification Proposed EDUs Proposed Capacity Fee Source for EDU Relationships 1 Low Density Residential (0 - 6.99 Units per Acre) 1.000 $12,388 Table 4-2, Line 4 2 Medium Density Residential (7.0 - 12.99 Units per Acre) 0.563 $6,970 Table 4-2, Line 4 3 High Density Residential (> 13.00 Units per Acre) 0.550 $6,808 Table 4-2, Line 4 4 Commercial and Irrigation (Meter Size Based)
5 Meter Size Flow Equivalency Proposed Capacity Fee Source for Meter Flow Equivalencies 6 3/4" 1.00 $12,388 Table 1-2, Column A (provided by City) 7 1.0" 1.70 $21,060 "
8 1.5" 3.30 $40,882 "
9 2.0" 5.30 $65,659 "
10 3.0" 11.70 $144,945 "
11 4.0" 20.00 $247,769 "
12 6.0" 41.70 $516,599 "
13 8.0" 60.00 $743,308 "
14 10.0" 96.70 $1,197,965 "
15 12.0" 143.30 $1,775,268 "
Table 4-8 shows a comparison of existing and proposed FY 2027 water capacity fees as originally presented in Table 1-1.
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
24 Table 4-8: Proposed Updated FY 2027 Water Capacity Fees Land Use Type
A
Current
EDUs
B
Current
FY 2026 Fee
C
Proposed EDUs
D
Proposed
FY 2027 Fee
E
$
Difference
%
Difference
Residential
Low Density (LDR)
0 – 6.99 Units per Acre 1.00 $12,688 1.000 $12,388 ($300) (2.36%) Medium Density (MDR)
7.00 – 12.99 Units per Acre 0.60 $7,614 0.563 $6,970 ($644) (8.45%) High Density (HDR)
> 13.00 Units per Acre 0.40 $5,074 0.550 $6,808 $1,734 34.17% Multi Family
per Dwelling Unit
0.40 $5,074 0.550 $6,808 $1,734 34.17%
Commercial and Irrigation
Meter Size
Meter Flow
Equivalencies
(1)
Current
FY 2026 Fee
Meter Flow
Equivalencies
Proposed
FY 2027 Fee
$
Difference
%
Difference
3/4" 1.0 $12,688 1.0 $12,388 ($300) (2.36%)
1.0" 1.7 $21,570 1.7 $21,060 ($509) (2.36%)
1.5" 3.3 $41,870 3.3 $40,882 ($988) (2.36%)
2.0" 5.3 $67,246 5.3 $65,659 ($1,587) (2.36%)
3.0" 11.7 $148,450 11.7 $144,945 ($3,504) (2.36%)
4.0" 20.0 $253,760 20.0 $247,769 ($5,991) (2.36%)
6.0" 41.7 $529,090 41.7 $516,599 ($12,490) (2.36%)
8.0" 60.0 $761,280 60.0 $743,308 ($17,972) (2.36%)
10.0" 96.7 $1,226,930 96.7 $1,197,965 ($28,964) (2.36%)
12.0" 143.3 $1,818,190 143.3 $1,775,268 ($42,922) (2.36%) (1) Meter flow equivalencies specified by the City
4.8. Annual Water Capacity Fee Adjustments
On an annual basis, the City adjusts its water capacity fees by applying data from the Engineering News Record Construction Cost Index (ENR CCI) or 3.0%, whichever is higher. Raftelis recommends that the City continue this policy.
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
25 5. Local Wastewater Capacity Fees
5.1. Sewer Units
The City’s wastewater capacity fees are assessed based on “sewer units.” The City’s Code of Ordinances provides a comprehensive discussion on the determination of Residential Sewer Units (Section 14.16.100) and Commercial and Industrial Sewer Units (Sections 14.16.100.1 and 14.16.100.2). Based on an analysis completed by Staff, the City provided service to 82,273 sewer units as of June 30, 2023. Projected sewer units in 2035 are 93,753 which represents an incremental growth of 11,480 sewer units over existing levels. The annual growth rate in sewer units through 2035 is 1.0% annually. This value as provided by City staff.
5.2. Methodology Used for Local Wastewater Capacity
Fees
The current local wastewater capacity fee is only $460 per sewer unit. Historically the City has required a new development to install the necessary sewer infrastructure through agreements with the developers. Due to concerns regarding the impact on the development community, Raftelis and City staff agreed that using the lower cost incremental cost approach was the preferred option.
Raftelis calculated a proposed local wastewater capacity fee of $817 using an incremental cost approach that featured planned growth-related capital expenditures specified by the City. The total growth-related capital expenditure used in the calculation was $9,375,000. A detail of these expenditures is shown in Table 5-1.
Table 5-1: Planned Growth-Related Capital Expenditures Through 2035 Year Expenditure Amount
2028 Vactor Truck $685,000
2029 CCTV Truck $450,000
2029 1/2 Ton Truck $70,000
2031 1/2 Ton Truck $70,000
2031 Wastewater Collections Building PGWWTP $4,050,000
2032 Wastewater Collections Building PGWWTP $4,050,000
Total $9,375,000
Using the incremental cost approach featuring planned capital improvement expenditures allowed for the development of a much less expensive, although still quantitatively based wastewater capacity fee. This fact notwithstanding, the proposed local wastewater capacity fee of $817 is a 77.6% increase over the current fee of $460. Similar increases can be expected as an outcome of future nexus studies.
City of Roseville, CA / Water and Wastewater Capacity/Connection Fee Update and Nexus Fee Study
26 Table 5-2: Calculation of Proposed Updated FY 2027 Local Wastewater Capacity Fee Line Description Amount
1 Projected Sewer Units in 2035 at a 1.0% Annual Growth Rate 93,753 2 Sewer Units as of June 30, 2023 82,273
3 Incremental Growth in Sewer Units 11,480
4 5 Planned Growth-Related Capital Expenditures $9,375,000 6 Sewer Units 11,480
7 Proposed Local Wastewater Capacity Fee $816.91
8 9 Current Local Wastewater Capacity Fee $460.00
10 $ Increase $356.91
11 % Increase 77.6%
5.3. Annual Local Wastewater Capacity Fee Adjustments
On an annual basis, the City adjusts its local wastewater capacity fees by applying data from the Engineering New Record Construction Cost Index (ENR CCI). Raftelis recommends that the City continue this policy.
March 13, 2025
Ms. Vicki Reid
Recycling and Organics Coordinator
City of Roseville
311 Vernon Street
Roseville, CA 95678
submitted via email: [email protected]
SUBJECT: Development Fee Update – R3 Final Report
Dear Ms. Reid,
R3 Consulting Group, Inc. (R3) is pleased to submit the attached Final Report for the solid waste development fee update to the City of Roseville (City).
This report presents our analytical methodology, results and findings, and recommendations regarding the residential, commercial, and multi-family solid waste development fees to pay for the cost of solid waste vehicles and containers post collection costs needed to provide solid waste, recycling and organic collection services to new residential and commercial developments.
Based on our analysis, the current development fees for:
» Single-family residential unit can be increased from $410.00 to $417.00. » Commercial development can be increased from $0.34 to $0.36 per square foot. » Multi-family can be changed from $139.00 per multi-family unit ($0.17 per square foot) to $0.21 per square foot.
Sincerely,
William Schoen | Sr. Director Carrie Baxter | Principal R3 Consulting Group, Inc. R3 Consulting Group, Inc.
916.782.7821 | [email protected] 916.878.7413 | [email protected]
1504 Eureka Road, Suite 220, Roseville, CA 95661 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com
TABLE OF CONTENTS
City of Roseville | Development Fee Update – R3 Final Report toc - i
1. Executive Summary
page 1
2. Methodology & Calculations
page 2
3. Recommendation
page 5
Attachments
Attachment 1 Residential Development Fee
Attachment 2 Commercial Development Fee
Attachment 3 Multi-Family Development Fee
Attachment 4 Development Fee Benchmark Comparison
1. EXECUTIVE SUMMARY
City of Roseville | Development Fee Update – R3 Final Report 1 of 5
Background
R3 was engaged by the City of Roseville (City) to assist it with establishing updated residential, commercial, and multi-family solid waste development fees to pay for the cost of solid waste vehicles and containers needed to provide solid waste, recycling and organic collection services to new residential and commercial developments. The City established its current fees in 2006. The analysis that established those fees utilized data from MuniFinancial’s General Plan Fiscal Impact Analysis report (Dec. 2005) that was prepared for the City. That analysis included detailed growth estimates, including commercial square footage and single family and multi-family unit projections through 2025. Those projections served as the basis for the calculation of the development fees. The current analysis was conducted without similar detailed growth projections although the general methodology used is similar to that of the prior analysis.
Purpose
The City charges developers residential and commercial solid waste development fees to finance the City’s Solid Waste Capital Purchase Fund. These fees are intended to pay for the cost of solid waste collection capital expenses associated with each new residential and commercial property (i.e., vehicles, carts, containers, and post-collection capital expense) and are held in the Solid Waste Capital Purchase Fund. The factors considered in developing these fees were the type of container used to store solid waste at the property, and the type of vehicle used to collect solid waste from the property. Based on these factors, single family units, which use plastic carts for storage and side load vehicles for collection, were segregated into one class, while multi-family and commercial units, which use metal bins for storage and front-end load vehicles for collection, were combined into a second class. The residential (single family homes and multiplexes), and multi-family impact fees were calculated and set on a per unit basis, and the commercial/industrial impact fees were set on a square footage basis.
The outcome of this Study is to develop an impact fee model to support the solid waste fees charged to developers, consistent with all relevant laws and regulations.
Methodology and Findings
To complete this Study, R3 reviewed and analyzed information provided by the City pertaining to the City’s capital costs associated with providing collection service. Using that information, we then calculated – as a subset of that total capital cost – the proportionate amounts necessary to cover the City’s costs, including vehicle and cart and container costs for new development. All calculated amounts in this Study are in current Fiscal Year (FY) 2024-25 dollars. Minor differences in dollar figures shown in the report are due to rounding.
Conclusions
Development Fee
Based on a review of the City’s capital cost to provide collection service to residential and commercial service, we determined that development fees for:
» Single-family residential unit can be increased from $410.00 to $417.00. » Commercial development can be increased from $0.34 to $0.36 per square foot. » Multi-Family development can be adjusted to a per square foot rate of $0.21.
2. METHODOLOGY & CALCULATIONS
City of Roseville | Development Fee Update – R3 Final Report 2 of 5
Single Family Residential Solid Waste Development Fee
The City’s current residential solid waste development fee is $410.00 per single family unit. That fee was calculated based on the cost of two (2) carts for each single family residential unit (SFU) and the allocated capital cost of the residential collection vehicles. The vehicle cost allocation was based on the number of residential accounts serviced per week by each collection vehicle. 1 For the purpose of updating the residential development fee, a similar methodology was used, with updated vehicle and cart costs, based on two scenarios:
» The existing 2-cart system.
» A future 3-cart system.
In addition, a square footage component was included that addresses single family units of less than and greater than 10,000 square feet (ft2) . Those SFUs of less than 10,000 ft2 were assumed to have one 95–-gallon trash cart, while those with greater than 10,000 ft 2 are assumed to have two 95–gallon trash carts.-
That analysis calculated residential solid waste development fees for the two scenarios based on 2024 vehicle and cart and container costs, rounded down to the nearest dollar, as follows:
Existing 2-cart System
» $417.00 per SFU of less than 10,000 ft2
» $582.00 for those with 10,000 ft2 or more. (Attachment 1). »
Future 3-cart System
» $666.00 per SFU of less than 10,000 ft2
» $831.00 for those with 10,000 ft2 or more. (Attachment 1).
Commercial Solid Waste Development Fee2
The City’s current commercial solid waste development fee is $0.34 per square foot of commercial development. The updated analysis calculated a fee of $0.36 per square foot. In order to be more conservative, unlike the original analysis, the updated analysis did not include costs related to the development of support facilities, which represented approximately 16% of the total costs that were considered in the prior analysis. In addition, the waste generation factor calculated as part of the updated analysis is 13% less than the factor calculated as part of the prior study. If we set the waste generation factor the same as the prior analysis and included a similar percentage of facility costs in the fee calculation, the updated fee would be $0.47 per square foot.
1 @ 3,400 accounts per route per week, each account is allocated 1/3,400th of the vehicle capital cost. 2 This analysis is specific to the City’s commercial collection system and does not account for the implementation of a 3-container system, which the City is considering. The commercial classification includes car washes, storage facilities, and industrial complexes.
Methodology & Calculations
City of Roseville | Development Fee Update – R3 Final Report 3 of 5
Solid Waste Front Loader Portion of Commercial Development Fee The calculation of the front-loader vehicle cost portion of the commercial development fee involved the following steps:
Vehicle Portion of Fee
» Calculate how many cubic yards of solid waste is generated per square foot of commercial development (0.00044 yd3) (Attachment 2);
» Determine how many cubic yards of solid waste each front-loader collects on average each week (2,583 yd3);
» Determine how many square feet of commercial development generates 2,583 cubic yards of solid waste (5.9 million ft2);
» Divide the cost of a front-loader plus 25% of a spare vehicle ($620,000 * 1.25 = $775,000), by the total number of square feet of developed space each front loader services weekly (5.9 million) to calculate the solid waste front-loading vehicle cost portion of the fee ($0.13 / ft2)
Bin / Container Portion of Fee
A similar methodology was used to calculate the bin portion of the fee. The total cost of a commercial 4-yard bin was divided by the total number of square feet of developed space each bin can accommodate on a weekly basis. That generated a bin cost of four cents ($0.04) per square foot of developed space.
Other Fee Portions
In addition to front loader solid waste routes (6 routes), the City also operates the following commercial routes:
» Cardboard Front Loaders (2 routes)
» Solid Waste Rear Loaders (1 route)
» Organic Waste Route3 (1 route)
» Roll-Off Vehicles (6 routes)
As with solid waste front loaders, there are vehicle and containers costs associated with each of these other commercial collection systems that need to be calculated and included in the development fee.
The development fee vehicle and container cost components for each of the four collection systems above were calculated using the established front end loader vehicle cost calculated above, adjusted to account for: (a) any differences in vehicle costs, and (b) the number of daily routes as compared to the number of front loader routes. The container cost was calculated in a similar manner with adjustments to the front loader container cost to account for differences in the cost and number of containers as compared to the solid waste front loader system.
Multi-Family Solid Waste Development Fee
The current multi-family development fee is $139.00 per multi-family unit and was developed using multi- family unit projections from the MuniFinancial Report. Similar detailed multi-family unit information was not available at the time of our analysis. As such, for purpose of updating that fee the analysis, R3 followed the same methodology described above for commercial accounts using data from sample (representative) multi-family accounts provided by the City.
3 Tractor-Trailer that can empty both bins and cans.
Methodology & Calculations
City of Roseville | Development Fee Update – R3 Final Report 4 of 5
That analysis found that the waste generation rate per square foot of multi -family development is 0.00026 cubic yards (Attachment 3), which equates to a multi-family development fee of $0.21 per square foot.
Solid Waste Development Fee Benchmark Comparison
R3 conducted a comparison of communities to document the solid waste development fees and categories these communities have established. Our survey resulted in a limited number of comparable benchmarks. The benchmark comparison found a range of solid waste development fees based on per unit, square foot, or waste volume as shown in our analysis (Attachment 4).
City of Roseville | Development Fee Update – R3 Final Report 5 of 5
3. RECOMMENDATION
Adopt New Development Fees
Adopt new development fees that are based on a nexus study proportionate to the square footage of the proposed units of development.
» Single-family residential unit: $417.00 for those with up to 10,000 ft2. » Single-family residential unit: $582.00 for those with 10,000 ft 2 or more. » Commercial development, including car washes, storage facilities, and industrial complexes: $0.36 per square foot.
» Multi-Family development: $0.21 per square foot.
Periodic Recalculation
The development fees listed above are based on the Solid Waste Division’s 2024 vehicle and cart and container budgeted costs. As such, to keep pace with inflation those fees should be periodically adjusted to reflect updated budget costs.
The fee could also be adjusted in the future for the actual vs. projected number of recyclable material and organic waste routes under a 3-container commercial collection system.4
4 Those Business Categories that have lower weekly service volumes (e.g., Public Storage Units) have lower allocation factors and associated lower allocated cost.
Attachment 1
https://r3cgi.sha re point.com/Sha re d Docume nts/Clie nts/ROSEVILLE/124030 - Impa ct Fe e + Ne xus Study/+ FINAL REPORT/Atta chme nts.xlsx / ATT 1 1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 B C D E F G H I J K L
Under 10,000
ft2
Additional
Cost Total
Organics + Recycling Participation Rate 80%
Accounts / Route Truck Cost Cost/Acct
w/Spare Ratio
(1)
weekly Solid Waste Vehicle 3,400 600,000$ 176.47$ 220.59$ biweekly Yard Waste Vehicle 8,500 600,000$ 70.59$ 88.24$ Vehicles 308.82$ 110.29$
Carts 108.00$ 54.00$
Total 417.00$ 164.29$ 582.00$
Current Development Fee 409.18$
(1) set at = 25%
Residential Development Fee 10,000+ ft2
Attachment 2
https://r3cgi.sharepoint.com/Shared Documents/Clients/ROSEVILLE/124030 - Impact Fee + Nexus Study/+ FINAL REPORT/Attachments.xlsx / ATT 2 1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
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21 22
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25 26
27 28
29 30
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33 34
35 36
37 38
A B C D E F G H I J K
Business Name Sq. Feet Address Trash # BinsBin Size Freq Weekly SW
yd3 Yd3/ft2
1 Chevy's 6,500 1919 Douglas Bl (1) 3yd = 5 x per week1 3 3 5 15 0.00231 2 Raising Canes 4,297 1220 Galleria Bl(2) 8yd = 7 x per week2 8 16 7 112 0.02606 3 Brookfield's 7,220 1817 Taylor Rd(1) 4yd = 3 x per week1 4 4 4 16 0.00222 4 Cattleman's 9,840 2000 Taylor Rd(1) 4yd = 4 x per week1 4 4 4 16 0.00163 5 Gaipao Gaucho 8,006 1400 Eureka Rd(1) 4yd = 2 x per week1 4 4 2 8 0.00100 6 Fat's Asian Bistro 7,157 1500 Eureka Rd(1) 6yd = 3 x per week1 6 6 3 18 0.00252 Subtotal 43,020 185 0.00430
7 KB Lava Ridge Mt LLC180,000 3010 Lava Ridge Ct(1) 4yd = 2 x per week1 4 4 2 8 0.00004 8Lawler Professional Bldg 22,140 2140 Professional Dr(1) 4yd = 2 x per week1 4 4 2 8 0.00036 9 KB Douglas Mt LLC 108,000 2901 Douglas Bl(1) 4yd = 3 x per week1 4 4 3 12 0.00011 10 Beard Land Improvement88,400 1101 Creekside Ridge Dr(1) 4yd = 5 x per week1 4 4 5 20 0.00023 11 300 Harding Blvd Holdings LLC42,688 300 Harding Bl(1) 4yd = 3 x per week1 4 4 3 12 0.00028 12 DDIP LLC 38,580 1200 Melody Ln(1) 2yd = 1 x per week1 2 2 1 2 0.00005 Subtotal 479,808 62 0.00013
13 West Roseville Collision Center12,136 10640 Industrial Av(1) 4yd = 2 x per week1 4 4 2 8 0.00066 14 Harris & Bruno 21,000 8555 Washington Bl(1) 6yd = 2 x per week1 6 6 2 12 0.00057 15 JFC Electric 8,280 7451 Galilee Rd(1) 4yd = 2 x per week1 4 4 2 8 0.00097 16 Mr. Sprinkler 20,076 100 Derek Pl (1) 4yd = 1 x per week1 4 4 1 4 0.00020 17 Precision Door Inc. 17,000 2120 March Rd(1) 4yd = 1 x per week1 4 4 1 4 0.00024 18 LB Construction 45,300 8655 Washington Bl(1) 5yd = 2 x per week1 5 5 2 10 0.00022 Subtotal 123,792 46 0.00037
19 Big 5 10,620 1909 Douglas Bl(1) 3yd = 2 x per week1 3 3 2 6 0.00056 20 Longs Drugs 30,621 5090 Foothills Bl(1) 4yd = 2 x per week1 4 4 2 8 0.00026 21 Michael's 24,336 1192 Galleria Bl(1) 8yd = 1 x per week1 8 8 1 8 0.00033 22 Antique Trove 40,000 236 Harding Bl(1) 8yd = 1 x per week1 8 8 1 8 0.00020 23 Safeway 55,922 989 Sunrise Av(1) 4yd = 5 x per week1 4 4 5 20 0.00036 24 Walgreens 15,120 3999 Foothills Bl(1) 4yd = 1 x per week1 4 4 1 4 0.00026 25 Raley's 67,759 4051 Woodcreek Oaks Bl(2) 3yd = 7 x per week2 3 6 7 42 0.00062 Subtotal 244,378 96 0.00039
Total 890,998 389 0.00044
Attachment 3
https://r3cgi.sha re point.com/Sha re d Docume nts/Clie nts/ROSEVILLE/124030 - Impa ct Fe e + Ne xus Study/+ FINAL REPORT/Atta chme nts.xlsx / ATT 3 3 of 4
533
534
535
536
537
538
539
540
541
542
A B G H I
Account Name Service Address
Weekly
Solid Waste
(yd3)
Ft2 Yd3/Ft2
AAH WOODCREEK LP 1295 HEMINGWAY DR 20 84,368 0.00024 AVANATH SUTTER LP 6725 FIDDYMENT RD 16 64,400 0.00025 LHE WOODCREEK WEST LLC 1890 JUNCTION BL 72 345,370 0.00021 MAIDU VILLAGE 1750 EUREKA RD 12 66,398 0.00018 PINNACLE OPID LLC 1100 ROSEVILLE PW 64 233,228 0.00027 SIERRA REGENCY 1015 MADDEN LN 48 143,100 0.00034 STANDARD CROCKER VENTURE LP 8000 PAINTED DESERT DR 40 126,342 0.00032 Totals 272 1,063,206 0.00026
Attachment 4
Single-
Family
($/unit)
Multi-
Family
($/unit)
Com. Ind. Res. Multi-Family Com./Ind.
Clovis*509.00$ 412.00$ 412.00$ 412.00$ Per Unit Per Unit Per Unit FY 2023-2024 Folsom627.00$ 417.00$ 0.47$ 0.47$ Per Unit Per Unit Per Square Foot Effective 2/9/25
Lincoln 85.00$ 85.00$ 54.63$ 65.13$ Per Unit Per Unit Per 1,000 Square Feet
Resolution
2024-005
Lompoc406.00$ varies**varies**varies** FY 2023-2024
Merced - Trash & Recycle$281.51 $159.99 Per Unit Per Unit Waste VolumeOrd. No. 2514, 3-16-2020
Merced - Organics$123.96 $70.45 Per Unit Per Unit Waste VolumeOrd. No. 2514, 3-16-2020
Redlands $0.07 $0.07 60.00$ 60.00$ Per Square FootPer Square FootPer 1,000 Square Feet
Ord. No. 2968,
7-16-2024
Roseville (Current)410.00$ 139.00$ 0.34$ 0.34$ Per Unit Per Unit Per Unit 2/15/06 Roseville (Proposed - 2-cart)417.00$ 0.21$ 0.36$ 0.36$ Per Unit Per Square FootPer Square Foot Draft Roseville (Proposed - 3-cart)666.00$ 0.21$ 0.36$ 0.36$ Per Unit Per Square FootPer Square Foot Draft * Unit is defined as each separate dwelling unit or EDU (EDU = Equivalent Dwelling Unit) Office - 1 EDU = 980 ft2 of gross parcel area
Industrial - 1 EDU = 980 ft2 of gross parcel area
Retail - 1 EDU = 980 ft2 of gross parcel area
** Commercial, MFD, Industrial are variable depending on size and number of containers based on cost and number of containers
17.37% surcharge of
subscribed collection
service level for 96
months from issuance
of building permit
Development Fee Benchmark Comparison
City
Fee Amount Per Building Type Fee Methodology
Last Update
1504 Eureka Road, Suite 220, Roseville, CA 95661 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com
April 18, 2025
Ms. Vicki Reid
Recycling and Organics Coordinator
City of Roseville
311 Vernon Street
Roseville, CA 95678
submitted via email: [email protected]
SUBJECT: Non-Exclusive Franchise Hauler Fee Update – R3 Final Report Dear Ms. Reid,
R3 Consulting Group, Inc (R3) is pleased to submit the attached Final Report for the solid waste Non-Exclusive Franchise (NEF) Hauler Fee update (Update) to the City of Roseville (City). This report presents our analytical methodology, results and findings, and recommendations regarding the NEF franchise fees to be paid by the City’s NEF solid waste collection service providers (NEF Haulers).
When we perform a Fee Study, we typically attempt to comprehensively analyze and calculate:
City’s Costs
Property Use Charges
Pavement Impacts
However, because of the limited operations performed by the NEF Haulers in the public right of way, the focus of the Update is primarily on the City’s costs and minimal pavement impacts. Total annual NEF Hauler franchise fees are based on annual tonnage hauled and were calculated such that they are not more than necessary to cover the City’s costs in managing and administering the NEF hauling operation, plus any Pavement Impacts.
Based on our analysis, the current NEF Fee can be increased from $6.88 per ton to a maximum of $12.43 (approximately $12.40) per ton but the City could also phase in the increase over time if it prefers.
Sincerely,
Jordan Muratsuchi | Sr. Consultant Carrie Baxter | Principal R3 Consulting Group, Inc. R3 Consulting Group, Inc.
916.782.7821 | [email protected] 916.878.7413 | [email protected]
TABLE OF CONTENTS
City of Roseville | Non-Exclusive Hauler Fee Update – R3 Final Report toc - i
1. Executive Summary
page 1
2. Methodology & Calculations
page 4
3. Findings & Conclusions
page 8
4. Recommendations
page 9
1. EXECUTIVE SUMMARY
City of Roseville | Non-Exclusive Hauler Fee Update – R3 Final Report 1 of 9 Background
The City allows any private hauling company to perform debris box operations within the City so long as an annual application/renewal fee and a monthly franchise fee of $6.88 per ton collected is paid to the City. These debris box operations are irregular and non-scheduled, based on individual customer demand. Additionally, the debris box operations are exclusively for construction and demolition waste.
Per the NEF Haulers’ permits, the NEF Haulers are to pay franchise fees to the City to cover the costs incurred by the City in managing, administering, enforcing, and supplementing the services provided in the NEF hauling operations, as well as the charge for the use of the public right-of-way for the special and lasting access to use it for set-out and collection of solid waste containers, and pavement impacts.
Purpose
The purpose of this Study is to identify the amounts that may be reasonably recovered through the Non- Exclusive Franchise Fees (Fees) paid by the NEF Haulers to the City as exempt from consideration as taxes. In terms of the applicable legal framework, this analysis seeks to quantify whether amounts that may be reasonably recovered through the Fees paid by the Contractors to the City fall within an exemption to the definition of a tax per Article XIII C, Section 1(e) of the California Constitution (“Proposition 26”).
There are four primary exceptions to the Proposition 26 definition of tax that are relevant:
Exception 1: “A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.”
Exception 2: “A charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.” Exception 3: “A charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof.”
Exception 4: “A charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property.”
Franchise Fees are often made up of three components. The first component includes the City’s proportionate costs (City’s Costs) per Exceptions 1, 2 and 3. The second component includes the proportionate charges for the Contractors’ use of the public right-of-way (Property Use Charges) per Exception 4. The third component includes the City’s proportionate costs associated with pavement impacts (Pavement Impacts) per Exception 1. Our analysis primarily focuses on City Costs due to the limited nature of the NEF Haulers.
Methodology and Findings
To complete this Study, R3 reviewed and analyzed information provided by the City pertaining to the City’s Costs and determined them to be reasonable. Using that information, we then calculated – as a subset of the total amounts in these categories – the proportionate amounts necessary to cover the City’s costs, including staffing and other costs during the course of providing sanitation service. All calculated amounts in this Study are in current Fiscal Year (FY) 2024-25 dollars. Minor differences in dollar figures shown in the report are due to rounding.
Executive Summary
City of Roseville | Non-Exclusive Hauler Fee Update – R3 Final Report 2 of 9 City’s Costs
The City’s costs are comprised of annual costs for management and administration of the NEF Hauler Permits. Staffing costs are calculated based on estimated time allocations (based on historical tonnages hauled by the NEF haulers and the assessment of current City employees). The calculation results in $141,472 in City’s Costs.
Property Use Charges
Typically, the annual charge to haulers for use of government property in the public right-of-way is calculated as a function of estimates for the number of solid waste accounts setting out solid waste collection containers in the right-of-way, the set-out area used, the amount of time it is used, and the market value for the per square foot use of the public right-of-way.
The City’s NEF Haulers exclusively provide on-call debris box services and do not perform regularly scheduled services. Further, debris boxes are often kept on private property. NEF Haulers are not junk hauling businesses. Junk hauling businesses are those specializing in the collection, hauling, and disposal of unwanted items on demand. Junk hauling businesses are prohibited from dropping debris boxes within the City, so the minimal waste collected by junk hauling businesses was not considered when developing the NEF Hauler Monthly Fee.
The Property Use Charges that would accordingly affect these debris box services, in which the containers are sometimes temporarily placed in the public right-of-way, is not included because the City has implemented an individual encroachment fee for temporary use of the public right-of-way. This encroachment fee acts as the property use charge and therefore, there are no property use charges that can be included in franchise fees paid by NEF Haulers.
Pavement Impacts
Typically, the annualized costs for pavement repair, maintenance, and rehabilitation are calculated based on the proportionate impact to pavement from solid waste collection vehicles compared to other sources of impacts. These are separate from Property Use Charges, in that Pavement Impacts are derived from damage caused to pavement by collection vehicles, while Property Use Charges are derived from the use of the public right-of-way for the set-out and collection of solid waste containers.
The debris box operation conducted by the NEF Haulers is irregular and based on individual customer demand. Therefore, the City’s NEF Haulers do not operate vehicles on the same streets on a regular schedule (unlike the City’s municipal operations). As such the impacts to pavement are inconsistent throughout the network of streets in the City and make up of a small portion of pavement impacted compared to solid waste vehicles that operate on a regular schedule over a full day.
Conclusions
Non-Exclusive Franchise Fee
The City’s Costs calculated in this Study are $125,817 and Pavement Impacts calculated in this Study are $15,655. Therefore:
The City may consider collecting a maximum of $141,472 Non-Exclusive Franchise Fee revenue from the combined NEF Haulers.
The City may consider Fees that are less than the amounts calculated by this Study, which would result in Fees being below the calculated amounts necessary to cover the City’s Costs. Given that the calculations in this Study are estimates and given unknown but possible changes in the legal framework affecting what may constitute allowable costs for Franchise Fee revenue recovery in the future, adoption of Fees below
Executive Summary
City of Roseville | Non-Exclusive Hauler Fee Update – R3 Final Report 3 of 9 the amounts calculated via this Study would be a conservative approach that would further bolster reasonableness.
R3 estimates that the maximum $141,472 annual Fee revenue for the NEF Haulers would equal approximately $12.40 per ton, applied to all NEF Haulers. This is an approximately 80% increase from the current fee of $6.88 per ton.
The maximum Fee calculated of $141,742 is a 95% increase from the current amount of franchise fees collected of $72,399. Should the City wish to increase the fee to this amount, the City may want to consider incremental adjustments over 2-3 years.
Should the City decide to increase the franchise fee to the maximum calculated amount, over a period of three (3) years, the franchise fee would increase by $1.80-$1.90 each of the three years.
Reasonableness of Estimates and Assumptions
In performing calculations, it was necessary to estimate certain values for which reasonable ranges exist.
Where assumptions were necessary for completing calculations, our objective was to apply assumptions on the lower end of the reasonable range based on our professional experiences working on similar matters for other agencies. Had we used other higher assumptions, the results of this Study would have been higher calculated Franchise Fee amounts. Therefore, we conclude that the calculated fee amounts are not higher than necessary to cover the City’s reasonable costs plus the reasonable value of the Contractors’ use of the public right-of-way.
Limitations
This Study relies on information provided by the City which we have reviewed and analyzed for reasonableness and accuracy but did not independently audit or verify. This includes any calculations that were conducted by other consultants to the City outside of this Study.
As stated above, it was necessary to estimate certain values for which reasonable ranges are known to exist. Though changes to estimates and other underlying assumptions may materially change the calculations, we have elected to apply estimates on the low end of reasonable ranges, thus minimizing the potential that changes in calculations would result in different ultimate findings. We have reviewed estimates and assumptions with City staff and have mutual concurrence on applicability and reasonableness of all such values in this Study.
Finally, the methodology employed by this Study calculates the reasonable values for the Fee within the context of current laws, regulations, and court rulings. Changes in the legal framework may require revisions to the methodology and findings contained in this Study.
2. METHODOLOGY & CALCULATIONS
City of Roseville | Non-Exclusive Hauler Fee Update – R3 Final Report 4 of 9 City’s Costs
Methodology
R3 reviewed and analyzed information provided by the City pertaining to the General Fund and Solid Waste Fund costs incurred for management, administration, regulatory compliance and enforcement, solid waste collection and clean-up, and other obligations associated with the NEF Hauler system.
These costs include and may not be limited to:
Staffing costs, including salaries and benefits.
Supplies and materials.
Using the total annual salary, benefits, and other cost information provided by City staff for FY 2024-25, we estimated the proportion of costs associated with management and administration of the NEF Haulers. We then calculated the proportionate totals and categorized them by the functions listed in the sections below.
Variables, Estimates and Assumptions
Staffing Costs
Variables associated with salaries and benefits (staffing costs) include the allocation of time that positions are dedicated to management and administration of the NEF Haulers (including time supervising others with primary responsibility for these duties), the amount by which funding of salaries and benefits will be paid by the Solid Waste Fund. The estimated time allocation by position category provided by the City and used in this Study is shown in Table 1, below. City Manager and City Attorney positions that are include are indirectly associated with the management and administration of the NEF Hauler Permits, including oversight and general overhead (which is not otherwise included in this Study). Other positions are either directly or indirectly responsible for the management and administration of the NEF Hauler Permits.
Table 1: Allocations of Staffing Time by Position
Positions Time
Allocation
Senior Solid Waste Billing Technician 18.8%
Waste Services Field Enforcement Supervisor 11.3%
Management Analyst 12.5%
City Manager’s Office 0.25%
City Attorney’s Office 0.25%
Street Sweeping Personnel 2.0%
R3 verified with City staff that the salaries and benefits included in this Study will be paid by the Solid Waste Services Fund.
Methodology & Calculations
City of Roseville | Non-Exclusive Hauler Fee Update – R3 Final Report 5 of 9 Analysis
Direct Management and Administration
This category includes City staffing for direct management and administration of the NEF Hauler Permits.
Staffing costs include allocated costs for the City’s Senior Solid Waste Billing Technician and Management Analyst, for a total annual calculated staffing cost in this category of $50,944. We have included an additional $5,600 annually to pay for the consulting costs to review the fee amounts. The total for the category is $56,544.
Indirect Management and Administration
This category includes City staffing costs for indirect management and administration, including supervision of those responsible for direct management and administration of the NEF Hauler Permits and associated responsibilities. Allocated costs for the City Manager’s Office and City Attorney’s Office are calculated for total annual costs in this category of $10,830.
Municipal Code Enforcement
This category includes City staffing costs for municipal code enforcement associated with the NEF Haulers. Allocated costs for the Waste Services Field Enforcement Inspector are calculated for total annual costs in this category of $17,995.
Street Sweeping
This category includes City staffing costs for street sweeping associated with the NEF hauling operation.
Allocated costs for the Street Sweeper Operators are calculated for total annual costs in this category of $40,448.
Annual Total of City’s Costs
Table 3, below, shows the total of the City’s Costs for management and administration of the NEF Haulers as calculated in this Study, by category.
Table 3: City’s Annual Costs by Category and in Total
Category Staffing Costs
Direct Management and
Administration $56,544
Indirect Management and
Administration $10,830
Municipal Code Enforcement $17,995
Street Sweeping $40,448
Total Annual City’s Costs $125,817
Methodology & Calculations
City of Roseville | Non-Exclusive Hauler Fee Update – R3 Final Report 6 of 9 Pavement Impacts
R3 reviewed and analyzed information provided by the City pertaining to the Pavement Impacts associated with solid waste vehicles on the City’s streets. The City provided R3 with a report from a separate consultant dated July 8, 2024 with Subject “Phase 2 Study – Comprehensive Proposition 218 Fees and Charges Assessment and Related Cost-of-Service Studies” which calculated the total annual solid waste vehicle portion of Pavement Impact costs to be $782,763.
These costs include and may not be limited to:
Pavement repair.
Pavement Maintenance.
Pavement replacement.
Based on the irregular nature of the NEF hauling operations, we assumed the Pavement Impacts from NEF hauling vehicles to be 2% of the total Pavement Impact costs attributed to solid waste vehicles from the City’s provided report.
Table 4, below, shows the total of the City’s Pavement Impact costs of the NEF Haulers.
Table 4: City’s Pavement Impact Costs
Category Amount
Total Solid Waste Truck
Pavement Impact1 $782,763
Percent NEF Hauling Vehicle
Impact 2%
NEF Hauler Cost Portion $15,655
Fee Comparison
A comparison of similar fees charged by communities for debris box services is shown in Table 5, on the following page. As shown in the table, communities typically charge a fee based on a percentage of revenue as opposed to the City’s method of charging a fixed fee per ton, however the City’s approach may be more justifiable in meeting the cost of service.
1 From the City’s Report “Final Phase 2 Report – Proposition 218 Fees and Charges Assessment and Related Cost-of-Service Studies” dated July 8, 2024.
Methodology & Calculations
City of Roseville | Non-Exclusive Hauler Fee Update – R3 Final Report 7 of 9 Table 5: Debris Box Fee Comparison
Community Debris Box Hauler Fee
Sacramento County 10% Gross Receipts;
$1,000 Application Fee
Sacramento City 10% Gross Receipts
Elk Grove 10%-20% Gross Receipts
(based on diversion rate)
Fairfield 13% Gross Receipts
Lincoln 10% Gross Receipts
Glendale 20% Gross Receipts
Citrus Heights 10% Gross Receipts
Folsom 8% Gross Receipts
3. FINDINGS & CONCLUSIONS
City of Roseville | Non-Exclusive Hauler Fee Update – R3 Final Report 8 of 9 Non-Exclusive Franchise Fee
R3 calculated estimates of the City’s Costs based on actual and estimated cost information provided by the City, and with reasonable and conservative assumptions for estimated values.
The sum of annual maximum City’s Costs calculated in this Study is $125,817.
The annual maximum Pavement Impact calculated in this Study is $15,655.
R3 estimates that the total maximum $141,472 annual Fee revenue for the NEF Haulers would equal approximately $12.40 per ton, applied to all NEF Haulers. This is an approximately 80% increase from the current fee of $6.88 per ton.
The calculated amounts bear a reasonable relationship to the NEF Haulers’ burdens on the City resulting from the management and administration of the NEF hauling operation.
The City’s Costs have been reviewed and confirmed by City staff as being representative of the actual time and costs incurred for these activities.
The application fee adjustment methodology and estimates used to determine the appropriate amount of staff time appear reasonable based on our understanding of the requirements for administering a non-exclusive franchise system.
The Fees calculated via this Study are maximum amounts, and the City may consider lesser amounts of Fees, especially given the unsettled legal landscape regarding cost categories that may be recovered via Franchise Fees.
4. RECOMMENDATIONS
City of Roseville | Non-Exclusive Hauler Fee Update – R3 Final Report 9 of 9 Incremental Adjustment Approach
The maximum calculated franchise fee is approximately 80% greater than the current fee. Should the City decide to increase the franchise fee to the maximum calculated, the City may wish to implement the updated fee through incremental adjustments over a series of three years, as to prevent a single large increase in fees.
Adjusting the franchise fee to the maximum calculated of $141,472, or approximately $12.40 per ton, over a series of three (3) years would result in fee adjustments shown in Table 6, below.
Table 6: Three (3) Year Incremental Adjustment of Franchise Fee to Maximum Calculated Category FY 24-25
(Current) FY 25-26 FY 26-27 FY 27-28
NEF Hauler Franchise
Fee (per ton) $6.88 $8.70 $10.60 $12.40
Periodic Recalculation
Over time, the City’s Costs associated with the NEF hauling operation and the value of Property Use Charges for use of the public right-of-way may change in ways that vary from the annual change in the CPI. Additionally, changes in City policies, programs, procedures, organization, geopolitical boundaries, laws, regulations, court rulings, and/or other factors may also trigger a need for recalculating fees.
R3 recommends the City consider updating this Study periodically (e.g., every five years) or more frequently if needed to recalculate fees in response to other factors.
133449
PUBLIC NOTICE
The above space is reserved for Court/County Filed Date Stamp
PROOF OF PUBLICATION
(2015.5 C.C.P.)
STATE OF CALIFORNIA
County of Placer
I am a citizen of the United States and employed by a publication in the County aforesaid. I am over the age of eighteen years, and not a party to the mentioned matter. I am the principal clerk of the Roseville Press Tribune, a newspaper of general circulation, in the City of Roseville, which is printed and published in the County of Placer. This newspa- per has been judged a newspaper of general circulation by the Superior Court of the State of California, in and for the County of Placer, on the date of May 5, 1952, (Case Number 17357). The notice, of which the attached is a printed copy (set in type not smaller than nonpareil) has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to-wit:
6/19/2026
I certify, under penalty of perjury, that the foregoing is true and correct.
LILY PHILAVANH
Dated in Roseville, California
6/19/2026
PROOF OF PUBLICATION
THE ROSEVILLE PRESS TRIBUNE
1030 High Street
Auburn, CA 95603
P.O. Box 5910
Auburn, CA 95604
ORDINANCE NO. ____
ORDINANCE OF THE COUNCIL OF THE CITY OF ROSEVILLE AMENDING SECTION
9.12.100 OF CHAPTER 9.12 OF TITLE 9 OF THE ROSEVILLE MUNICIPAL CODE REGARDING HEALTH AND SAFETY – SOLID WASTE IMPACT FEE, SECTION 9.17.040 OF CHAPTER 9.17 OF TITLE 9 OF THE ROSEVILLE MUNICIPAL CODE REGARDING FRANCHISE TERM AND FRANCISE FEE, SECTIONS 14.08.025 AND 14.08.026 OF CHAPTER 14.08 OF TITLE 14 OF THE ROSEVILLE MUNICIPAL CODE REGARDING
WATER CONNECTION AND STANDARD CONNECTION FEES, AND SECTION
14.16.060 OF CHAPTER 14.16 OF TITLE 14 OF THE ROSEVILLE MUNICIPAL CODE
REGARDING LOCAL SEWER CONNECTION FEE
THE CITY OF ROSEVILLE ORDAINS:
SECTION 1. Section 9.12.100 of Chapter 9.12 of Title 9 of the Roseville Municipal Code is hereby amended to read as shown on Attachment “A”.
SECTION 2. Section 9.17.040 of Chapter 9.17 of Title 9 of the Roseville Municipal Code is hereby amended to read as shown on Attachment “B”.
SECTION 3. Section 14.08.025 and Section 14.08.026 of Chapter 14.08 of Title 14 of the Roseville Municipal Code is hereby amended to read as shown on Attachment “C”.
SECTION 4. Section 14.16.060 of Chapter 14.16 of Title 14 of the Roseville Municipal Code is hereby amended to read as shown on Attachment “D”.
SECTION 5. This ordinance shall be effective at the expiration of sixty (60) days from the date of adoption.
SECTION 6. The City Clerk is hereby directed to cause this ordinance to be published in full at least once within fourteen (14) days after it is adopted in a newspaper of general circulation in the City, or shall within fourteen (14) days after its adoption cause this ordinance to be posted in full in at least three (3) public places in the City and enter in the Ordinance Book a certificate stating the time and place of said publication by posting.
PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of _______________, 2026, by the following vote on roll call:
AYES COUNCILMEMBERS:
NOES COUNCILMEMBERS:
ABSENT COUNCILMEMBERS:
______________________________
MAYOR
ATTEST:
_________________________________
City Clerk
ATTACHMENT “A”
§ 9.12.100. Solid waste impact fee.
A. Solid Waste Impact Fee Established. Each single -family waste generator and commercial waste generator serviced by city-owned containers collection pursuant to this chapter shall pay a solid waste impact fee upon issuance of a building permit as described below. The fee is based on a “Study” (Development Fee UpdateSolid Waste Impact Fee Model), which is attached to the council communication, dated March 13, 2025February 15, 2006, entitled “Development Fee UpdateSolid Waste Impact Fee.” Containers shall be delivered upon issuance of a certificate of occupancy for the unit/development by the chief building inspector.
1. Noncommercial.
a. Single-family residential dwelling unit: $417.00$410.00 per unit of less than 10,000 ft2 and $582 per unit of 10,000 ft2 or greater. b. Multifamily residential dwelling unit: $0.21 per square foot$139.00 per unit.
2. Commercial/industrial development: $0.36$0.34 per square foot.
The above fees will be effective October 19, 2026.
The Construction Cost Index (CCI) inflationary fee adjustment shall become effective July 1, 2027. The fee established by this chapter shall be adjusted annually July 1st beginning on July 1, 2027, by a percentage equal to the adjustment rate for the prior year for construction costs as determined by the director in the preceding June. The director's determination shall be based upon averaging the Construction Cost Index (CCI) for 20 cities and for San Francisco, as published in the Engineering News Record publication for the preceding 12 months ending in May.
B. Ownership. The city shall retain ownership of the containers. Persons owning or renting property served by such containers are responsible for the security of the containers. In the event of fire, theft, or other disappearance of container from the property a replacement container will be obtained from the city upon payment of the fee established in subsection A of this section. Persons owning or renting property served by such containers shall, upon vacating the premises, leave the primary container for th e next occupant in a secure location upon the premises.
Persons who have ordered an extra container shall, upon vacating the premises, call the city to have the extra container removed. Persons owning or renting property served by such containers are responsible for the appearance and cleanliness of the container.
C. Replacement Containers. A replacement container may be obtained upon payment of the fee established in subsection A of this section. Replacement of a container no longer usable due to normal wear shall not be subject to a replacement fee.
ATTACHMENT “B”
§ 9.17.040. Franchise term and franchise fee.
A franchise for refuse hauling shall be for a term of two years. In addition to a franchise application fee, each franchise shall be required to pay a franchise fee of $10.60 from October 19, 2026, to June 30, 2027,six dollars and eighty-eight cents to the city for every ton of refuse collected and disposed of within the city. Thereafter, the fee will increase to $12.40 from July 1, 2027. The franchise fee shall be assessed based on the monthly reports required in Section 9.17.080, and shall be paid monthly by the franchisee.
A franchise may be renewed for one or more additional periods aggregating not more than two years, upon the recommendation of the director. Any person holding a franchise for refuse hauling shall obtain, provide and continuously maintain a city business license, and shall obtain, provide and continuously maintain insurance pursuant to city insurance requirements as set forth in Section 9.17.110.
If franchise fees are not paid by the franchisee at the times required by this section, then in addition to the franchise fees, the franchisee shall pay a late payment charge in an amount equal to two percent of the franchise fee that is due, plus interest equal to one and one-half percent per month of the entire balance due until paid in full.
ATTACHMENT “C”
§ 14.08.025. Water connection fees.
A. In order that appropriate provision be made for sharing the costs of the maintenance and expansion of the raw water supply, water treatment, storage, and distribution facilities of the city by those who receive the benefits thereof, there are established connection fees to such facilities, which fees shall be imposed in addition to the service connection costs charged pursuant to Section 14.08.020. Such additional water connection fees include a "standard connection fee" and an "irrigation connection fee." The fees shall be set so that they are equal to, but not greater than, the cost of service.
B. The water connection fees shall be based upon the applicable "dwelling unit equivalent" ("DUE") and density assignment. The fee for one DUE shall be $12,388.00$9,363.00 (per LDR unit), $6,970.00$5,618.00 (per MDR unit), $6,808.00$3,636.00 (per HDR unit) and $12,388.00$9,363.00 (per nonresidential unit) on October 19, 2026July 1, 2018.
C. The connection fee amount set forth above shall be adjusted annually on July 1st of each year by three percent or by a percentage equal to the inflation rate for the prior year for construction costs as determined by the environmental utilities director in the preceding June, whichever is greater. The director's determination of the percentage equal to the inflation rate for the prior year for construction costs shall be based upon the Engineering News Record, Construction Cost Index for the prior 12 months ending in May. The environmental utilities director shall report the amount of the adjustment in percentage terms and the dollar amount due per DUE to the city council annually at the first regular meeting of the council following the adjustment of the fee.
D. Except as otherwise provided, all water connection fees established by this chapter shall be payable upon issuance of a building permit. Connection fees will be determined using the amount in effect on the date of building permit issuance.
§ 14.08.026. Standard connection fee.
A. The standard connection fee for various types of service and applicable DUEs are based upon water service sizes required by the Uniform Plumbing Code and DUEs as shown in Section 14.08.029 for nonresidential connections and upon large lot use density categories for residential connections as defined herein. The standard connection fee shall be calculated as follows:
For all dwellings, as defined in Roseville Municipal Code Section 19.08.080(F), the connection fee shall be based upon the large lot land use density as defined within the Land Use Element of the city's general plan, the water service size as required by the Uniform Plumbing Code, and the equivalent DUEs as shown in Section 14.08.029. The minimum connection fee shall be based on a three -quarter-inch service size and the equivalent dwelling unit shall be one DUE if zoned low density residential; 56.360 percent of the cost of one DUE for each dwelling unit if zoned medium density residential; and,
55.040 percent of the costs of one DUE for each dwelling unit if zoned high density residential. Fees shall not be based on the size of the master meter to a multifamily dwelling. Multifamily dwellings shall also pay an irrigation connection fee.
B. For all dwellings, as defined in Roseville Municipal Code Section 19.08.080(F), as may be amended from time to time, that require automatic fire protection systems pursuant to Roseville Municipal Code Section 16.16.110, as may be amended from time to time, the increased service size will not be assessed an additional fee associated with the fire protection system requirement. Connection fees shall be based on a three-quarter inch service size and the equivalent dwelling units required by subsection A withou t consideration for any fire protection system required by Roseville Municipal Code Section
16.16.110, as may be amended from time to time.
C. No additional water connection fee shall be charged for facilities located within a multifamily dwelling complex that are appurtenant to the general function of the multifamily dwelling complex. Such facilities include, but shall not be limited to, community centers, recreational centers, rental offices, maintenance offices and fire systems.
D. Pursuant to the fee policy identified in Roseville Municipal Code Section 19.60.100, as may be amended from time to time, no water connection fee shall be charged for accessory dwelling units developed within existing structures.
ATTACHMENT “D”
§ 14.16.060. Local sewer connection fee.
A. A local sewer connection fee shall be charged in accordance with Section 14.16.010 for each connection to the city-owned public sewer.
B. The local sewer connection fee shall be $817.00$363.00 per sewer unit on October 19, 2026.
C. The Construction Cost Index (CCI) inflationary fee adjustment shall become effective July 1, 202713. The fee established by this chapter shall be adjusted annually July 1st beginning on July 1, 202713 by a percentage equal to the adjustment rate for the prior year for construction costs as determined by the director in the preceding June. The director's determination shall be based upon averaging the Construction Cost Index (CCI) for 20 cities and for San Francisco, as published in the Engineering News Record publication for the preceding 12 months ending in May. The resultant fee shall be rounded to the nearest dollar figure.